A crowded and clumsy market full of people, running and writing some scores on sheets, yelling on phones and carrying the unusual gestures on their faces - that's the way a stock market looks like. A stock exchange has always been the interest of the investors and an ocean of uncertainty where investors plunges on their own will. It is not new, even in 12th century it existed in raw form in France. During this long journey, it must have witnessed many hues of many huddles. The coloration and de-coloration of lucks has been a distinct feature of stock market.
Literally, stock exchange refers to the corporation or the organization that facilitates the traders and investors to trade company stocks and other securities. They also provide facilities regarding the issue and redemption of securities and the payment of incomes and dividends through capital events and other financial institutions. The securities to be traded on stock exchange include shares, unit trust and bonds. The listing of the companies is really needed to be listed on stock exchange to be traded. As such, there is a centrally located place where the stocks are enlisted. Gone those days when there was a huddle in stock market. Now, the market has converted into electronic market since the Internet becomes popular.
Stock exchange features various facilities. Using computer to trade without physically visiting stock market is the main deal that revolutionized the stock market. The speedy trading, automatic transfer, online brokers and other facilities also make online stock trading become more and more popular.
Just few words emphasizing over the role of stock exchange presence:
· Raising capital: Companies listed on stock exchange generally issue shares and securities, in turn, purchased by traders in return of profits. However, the money extended to buy shares is the capital that can be used by companies for its own prosperity.
· Mobilizing investment: it’s due to trading in stock market that the savings are mobilized. Share market provided better prospects of re-allocation of funds. The funds are at least in motion rather than being idle in deposits in banks. Hence, “money generates money”, is proven to be a better option rather the money lying idle with banks.
· Company growth: with the ability to raise funds easily, it tends to let the company grow. The money invested by people is used forth to enhance opportunities for companies. Widening product lines, expanding businesses, all are the share of share market.
· Re-allocation of wealth: not only the wealth is allocated with the companies to grow; rather the buying and selling of stocks and securities let various people make money and hence, wealth are relocated from time to time with different traders.
· Government eye: with the companies enlisted on the stock exchange, it provides government to keep a check over companies. Even the companies. With those of public and private management can be compared.
· Small investor’s interest: the stock exchange has a paramagnetic attraction for small and big investors. It not only has big fishes gushing; rather has an increasing amount of small investors struggling to earn their part of returns. With the introduction of online trading, this trend has been on a boom.
· Raising funds for developmental themes: government, through shares and securities, can easily raise funds in share market. There are many investors who like to invest in government companies due to their reliability and credibility. It makes government raise capital to invest in developmental projects regarding the infrastructure, welfare and social developments of society. Calculator for economy: stock exchange acts as a calculator to calculate the ups and downs of the economy. The free mobility of shares decides the prices of the shares; hence, an uprising in share market reflects the boom in the economy. The factor of depression, economic recession and financial crises tends stock market to crash down. Therefore, the movement of shares and general stock index indicates the prevailing trend of the economy.