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| Stock market |
Definition of the stock exchange
- The Stock Market The Stock Market is the market that regulates the buying and selling of securities, such as stocks and bonds, by following the factors that govern them and are related to the nature of supply and demand within the financial market.
- The stock market is also defined as a market that depends on the application of investment in securities, such as the purchase and sale of shares issued by private companies.
- Another of the definitions of the stock market is the physical or virtual place where a group of sellers and buyers are located in order to achieve trading of securities between them. This market is divided into two markets: the primary market through which securities are issued for the first time, Financial statements that were previously issued.
The emergence of the stock market:
- The city of Venice was the first place to witness the trading of securities in 1300. It was used as a container for information on the various papers offered. In 1531, the stock exchange appeared more clearly in the city of Antwerp in Belgium, where brokers met to carry out business transactions and follow up debts Of individuals. In 1600 AD with the emergence of the East India Company this contributed to the promotion of the idea of the financial market by granting the French, British and Dutch governments the company documents that help in the collection of their dividends. Over time the first stock exchange appeared in London in 1773, but was restricted in terms of Dealing with stocks, unlike the New York Stock Exchange, which used to trade shares in its financial market.
- Developments in 21st century telecommunications and Internet technology have directly affected the nature of trading in financial markets, transforming financial transactions into electronic trading, resulting in a change in the world of investments, and customers are using computer systems to apply special sales and purchases In securities; in order to reach the implementation of transactions between parties in easy ways.
Characteristics of Stock Market:
- The stock market features a range of characteristics:
- Returns and Risks: Fundamental characteristics of the stock market. Assets, such as equities, are characterized by a high degree of risk and are influenced by the particular changes in the economic environment and the nature of the competition between companies in terms of sales and profits, which contribute to the determination of the prices of these shares. Changes are the fluctuations in financial markets that are the result of changes in prices associated with a range of events, such as government economic reports and enterprise profits, so successful investors in the financial markets are careful to hedge changes and volatility by diversifying investments in their portfolios Investment. Liquidity: is the provision of the stock market margins that illustrate the differences between buyers and sellers of securities by encouraging these markets to combine enterprises and companies from all over the world, and contributed to information technology to promote and support private trading in the financial markets; And participants in these markets. Global: One of the characteristics and advantages of the stock markets, bringing together all European, American and Asian companies together, which helps to encourage investors and institutions to use electronic networks available around the clock in the application of trading. Regulation: One of the most important characteristics of the financial markets. It depends on the existence of laws that regulate them and ensures that all investors receive private information in investment operations at the right times.
Importance of the stock market:
- The stock market is an important market in the economic sector and summarizes its importance according to the following points:
- Economist: The stock market is used as an indicator to measure the economic situation of countries, helps to reverse all changes, and clarifies stock prices in terms of the rise or fall, which indicate the boom or recession in the economic situation. • Set prices for securities: help to provide values for securities that are based on the impact of supply and demand, and contribute to the assessment of the nature of demand for these securities, which is an important benefit to investors; Ensuring the integrity of financial operations: It is important to apply these markets, depending on the observation of the safety of companies and their ability to apply regulations and rules during dealing with the stock exchange. Participation in economic growth: The stock markets support the ability to invest, through the exchange of securities between different companies, which leads to the construction of capital and contribute to economic development. Encouraging savings and investment: By providing investment offers for most securities, which helps attract many individuals towards savings in order to invest in securities offered through companies, rather than applying investments in assets that do not achieve any financial returns, such as gold.
Stock Market Objectives:
- The stock market seeks to achieve a set of objectives, the most important of which are:
- Building a secure investment environment capable of achieving credible competition. Developing all methods and means used in trading; applying the best and latest methods. Development of work in the stock market; through excellence in services provided to individuals and enterprises. Provide information about trading to investors and dealers in the stock market. Supporting private awareness in investment, which includes all individuals in the community; especially those dealing with the stock market. Diversity in financial instruments used by investors in the stock market.
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