Have you ever wondered what is the common link between Microsoft, Google, Arcelor-Mittal and other billion dollar companies? It is that they all are listed on the stock exchange. Stock exchange is the place where stock traders or brokers buy and sell a companies stock. Also, it allows for the redemption and issue of securities, payment of dividends and income and other economic instruments. Unit trusts, shares issued by companies and other investment bonds and products are some of the securities that are traded on a stock exchange.
The companies list themselves on a stock exchange. General public can buy or sell your share and gain or lose a substantial amount of money. However, a person can not directly buy or sell the share of a company. Shares are brought through the brokers or stock market traders, who are the members of the stock exchange. The value of a company's share depends on its market value, and the value of a share changes as per its quarterly results and other developments.
London stock exchange was the first stock market of the world. Other stock exchanges are: Shanghai Stock Exchange, NASDAQ, NYSE Euronext, Hong Kong Stock Exchange, Australian Securities Exchange and Frankfurt Stock Exchange. All the major IT companies of the world are listed on NASDAQ in America. Stock exchange is a reflection of the economy of a country. If the value of a stock market is high, it indicates that the economic situation of a country is healthy. Depression and economic recession can pull the value of share market down. Any fall in agricultural or industrial production and climate change can lower the value of a stock market. Any change in stock exchange of a developed country can directly affect the stock exchange of other countries. For instance rise in debt fear in United States lead to the fall in the value of economy the world over. Also, attack on world trade center in united state; saw the prices of stock prices in red. Red color indicates negative color while green stands for rise in share prices.
With the advent of the Internet, stock trading can now be done online. Stock exchanges the world over are closed on Saturdays and Sundays. Also, on the national holidays it is closed. The initial pricing of bonds and stocks is done first in primary market and then in secondary market.
The roles of stock exchanges in the economy are : ?Raising Capital A company can raise money by selling shares to the public. ?Mobilizing Savings Diverting resources from bank and other financial resources to shares can make you gain money, and result in economic growth. ?Facilitating a firm growth Firms acquire other company so as to hedge against instability, essential business assets, increase channels of distribution and spread out the product lines. ?Relocation of Wealth The company's distribute their profit share to their stock holders in the form of dividend. This way more and more people invest in their company, and the money they receive can be used for growth of the company.
Stock Market Malaysia - The Bursa Malaysia Berhad is an important member of the global stock markets, with a history stretching back almost 80 years. Instituted in 1930, the private Singapore Stockbrokers' Association was the first sanctioned securities trading organization in Malaysia. This association of stock market malaysia was renamed the Malayan Stockbrokers' Association in 1937, but did not yet publicly trade shares.
In 1960, public trading of shares was inaugurated with the public Malaysian market, called the Malayan Stock Exchange. The Malayan Stock Exchange was the predecessor of the modern Malayan securities market. The Malayan Stock Exchange was renamed the Stock Exchange of Malaysia in 1964.
The stock market malaysia operations continued as the Stock Exchange of Malaysia and Singapore (SEMS) after Singapore seceded from Malaysia in 1965. The exchange split into the Stock Exchange of Singapore, and the Kuala Lumpur Stock Exchange Board in 1973, following the separation of the Malayan and Singapore currencies. In 1976, the Kuala Lumpur Stock Exchange was incorporated to take over operations of the KLSEB. The KLSEB was renamed the Kuala Lumpur Stock Exchange in 1994.
Under direction of the Demutualization Act, in 2004 the klse stock market was converted from a not-for-profit organization limited by the guarantee of its membership, to an entity limited by its shares, called the Bursa Malaysia Berhad. At this time, the stock market malaysia exchanges had a market capitalization of US $189 billion. With conversion, the securities exchange part of the business was transferred to a wholly-owned subsidiary, Bursa Securities. In 2005, Bursa Malaysia was listed on the Main Board of Bursa Malaysia Securities Berhad.
The main index, called the Kuala Lumpur Composite Index (KLCI) passed the 1,000 milestone in 2006, and in June 2007 held a market capitalization of US $307 billion. The market operations are divided into a Securities Exchange, a Derivatives Exchange, and an Offshore Exchange.
Larger companies are listed on the Bursa Malaysia Securities Main Board, medium sized companies on the Second Board, and high growth and technology companies on the MESDAQ market. There is also a separate board for offshore companies. Futures and options contracts are traded on the Derivatives Exchange, operated by Bursa Derivatives. These capital markets are regulated by various acts of parliament. The network of holding companies also develops and distributes comprehensive market information products and services.
Needless to say, there is a whole world of trading opportunities outside of North America. Plenty of company's with great stories, great potential and greater risk. Increase the risk, increase the chances of reward - that is what it is all about. Investing overseas is profitable for many traders who see a devalued US dollar slowly eating away at their personal net worth. Trading in stronger foreign currencies can help to increase your overall return. Of course, it can also result in a much higher loss to your hard earned money. You'll need to ask yourself a few questions about how serious you are about trading overseas, and whether or not you are ready to accept the necessary risk.
Both Amit Malhotra & Christopher Smith are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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