Information On Stock exchange

A stock exchange is an entity which provides "trading" facilities for stock broker and trader (finance) to trade stock and other security (finance) Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividend . The securities traded on a stock exchange include shares issued by companies, unit trust , Derivative (finance) pooled investment products and Bond (finance) To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investor is by definition done in the primary market and subsequent trading is done in the secondary market A stock exchange is often the most important component of a stock market Supply and demand in stock markets is driven by various factors which, as in all free market , affect the price of stocks (see stock valuation . There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchangeor over-the-counter (finance) This is the usual way that Derivative (finance) and Bond (finance) are traded. Increasingly, stock exchanges are part of a global market for securities.

The first stock exchanges

lt;!-- This section is linked from Global financial system --> In 12th century France the {{lang|fr|courtiers de change}}were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. As these men also traded in debts, they could be called the first broker . Some stories suggest that the origins of the term " came from the Latin {{lang|la|bursa}}meaning a bagbecause, in 13th century Bruges the sign of a purse (or perhaps three purses), hung on the front of the house where merchants met. Image:Brugge - Saaihalle en beurs.jpg Belgium ]]The story may well be apocryphal, however it is possible that in the late 13th century commodity traders in Bruges gathered inside the house of the Van der Burse family (for some a Venice family with original name "Della Borsa" and three leather bags as coat-of-arms), and in 1309 they institutionalized this until now informal meeting and became the "Bruges Bourse." The idea spread quickly around Flanders and neighboring counties and "Bourses" soon opened in Ghent and Amsterdam In the middle of the 13th century, Venice bankers began to trade in government securities. In 1351, the Venetian Government outlawed spreading rumors intended to lower the price of government funds. There were people in Pisa Verona Genoa and Florence who also began trading in government securities during the 14th century. This was only possible because these were independent city states ruled by a council of influential citizens, not by a duke. The Dutch later started Joint stock company which let shareholder invest in business ventures and get a share of their profits—or losses. In 1602, the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange It was the first company to issue stock and Bond (finance) In 1688, the trading of stocks began on a stock exchange in London On May 17, 1792, in order to more easily trade cotton, twenty-four supply brokers signed the Buttonwood Agreement outside 68 Wall Street in New York underneath a buttonwood tree On March 8, 1817, properties got renamed to New York Stock & Exchange Board. In the 19th century, exchanges (generally famous as futures exchange ) got substantiated to trade futures contracts and then choices contracts. There are now a large number of stock exchanges in the world.

The role of stock exchanges

Stock exchanges have multiple roles in the economy This may include the following:lt;/ref>

Raising capital for businesses

The Stock Exchange provide company (law) with the facility to raise capital (economics) for expansion through selling shares to the investing public.lt;/ref>

Mobilizing savings for investment

When people draw their savings and invest in shares, it leads to a more Rationality allocation of resources because funds, which could have been consumed, or kept in idle Deposit account with bank , are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture commerce and industry resulting in stronger economic growth and higher Productivity (economics) levels of firms.

Facilitating company growth

Companies view acquisitions as an opportunity to expand product line , increase distribution channels, hedge against volatility, increase its market share or acquire other necessary business asset . A takeover bid or a mergers and acquisitions agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.

Profit sharing

Both casual and professional stock investor , through dividend and stock price increases that may result in capital gain , will share in the wealth of profitable businesses.

Corporate governance

By having a wide and varied scope of owners, companies generally tend to improve on their management standards and Efficiency (economics) in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately held company (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). Despite this claim, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dot-com bubble in the late 1990s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam Products (2001), Webvan (2001), Adelphia Communications Corporation (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Bear Stearns (2008), Lehman Brothers (2008), General Motors Chapter 11 reorganization (2009) and Satyam Computer Services (2009) were among the most widely scrutinized by the media. However, when poor financial, ethical or managerial records are known by the stock investors the stock and the company tend to lose value. In the stock exchanges, shareholders of underperforming firms are often penalized by significant share price decline, and they tend as well to dismiss incompetent management teams.

Creating investment opportunities for small investors

As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investor because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.

Government capital-raising for development projects

Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bond (finance) These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.

Barometer of the economy

At the stock exchange, share prices rise and fall depending, largely, on market (economics) forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession depression, or financial crisis could eventually lead to a stock market crash Therefore the movement of share prices and in general of the stock index s can be an indicator of the general trend in the economy.

Major stock exchanges

Image:Paternoster Square.jpg the City of London ] Image:Photos NewYork1 032.jpg New York City ] File:São Paulo Stock Exchange Building.jpg Sao Paulo ] Image:Sydney Exchange Centre Entrance.jpg s Sydney Exchange Centre, Sydney ] File:Palazzo_mezzanotte1.jpg Milan Stock Exchange]] Image:TokyoStockExchange1144.jpg Tokyo ] File:TSXExchangetower.jpg Toronto ] File:Boerse Frankfurt front.JPG Frankfurt ] File:Palais Brongniart Paris.jpg Paris ] File:Zuerich Boerse.jpg Zurich ] File:Bolsa_Mexicana_de_Valores.png Mexico City ] The main stock exchanges: *American Stock Exchange *Australian Securities Exchange *Athens Stock Exchange *Belgrade Stock Exchange *Berliner Börse *Bermuda Stock Exchange *Bolsa Mexicana de Valores *Bolsa de Valores de Colombia *Bolsa de Valores de Lima *Bombay Stock Exchange *Bucharest Stock Exchange *Budapest Stock Exchange *Bulgarian Stock Exchange - Sofia *Cairo & Alexandria Stock Exchange *Casablanca Stock Exchange *Channel Islands Stock Exchange *Chicago Stock Exchange *Czech Stock Exchange - RM-SYSTÉM *Euronext Amsterdam *Euronext Brussels *Euronext Lisbon *Euronext Paris *Frankfurt Stock Exchange *Ghana Stock Exchange *Helsinki Stock Exchange *Hong Kong Stock Exchange *Indonesia Stock Exchange *Istanbul Stock Exchange *JASDAQ *JSE Securities Exchange *Karachi Stock Exchange *Korea Stock Exchange *Kuwait Stock Exchange *London Stock Exchange *Madrid Stock Exchange *Malaysia Stock Exchange *Milan Stock Exchange *Montreal Stock Exchange *Nagoya Stock Exchange *National Stock Exchange of India *New York Stock Exchange *New Zealand Exchange *Nigerian Stock Exchange *Osaka Securities Exchange *Philippine Stock Exchange *Santiago Stock Exchange *São Paulo Stock Exchange (BOVESPA *Shanghai Stock Exchange *Shenzhen Stock Exchange *Singapore Exchange *Stockholm Stock Exchange *Stock Exchange of Thailand *Taiwan Stock Exchange *Tehran Stock Exchange *Tel Aviv Stock Exchange *Tokyo Stock Exchange *Toronto Stock Exchange *Warsaw Stock Exchange *Zurich Stock Exchange See also: :Category:Stock exchanges

Listing requirements

Listing requirements are the set of conditions imposed by a given stock exchange upon companies that want to be listed on that exchange. Such conditions sometimes include minimum number of shares outstanding, minimum market capitalization, and minimum annual income.

Requirements by stock exchange

Companies have to meet the requirements of the exchange in order to have their stocks and shares listed and traded there, but requirements vary by stock exchange: * Bombay Stock Exchange: Bombay Stock Exchange (BSE) has requirements for a minimum market capitalization of Rs.250 Million and minimum public float equivalent to Rs.100 Million.http://www.bseindia.com/about/abintrobse/listsec.asp About Us] * London Stock Exchange: The main market of the London Stock Exchange has requirements for a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25 per cent) and sufficient working capital for at least 12 months from the date of listing. * NASDAQ Stock Exchange: To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years.http://www.nasdaq.com/about/listing_information.stm NASDAQ Corporate -NASDAQ Listing Information] * New York Stock Exchange: To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.http://www.nyse.com/Frameset.html?displayPage/listed/1022540125610.html

Ownership

Stock exchanges originated as mutual organization , owned by its member stock brokers. There has been a recent trend for stock exchanges to demutualize where the members sell their shares in an initial public offering In this way the mutual organization becomes a corporation, with shares that are listed on a stock exchange. Examples are Australian Securities Exchange (1998), Euronext (merged with New York Stock Exchange), NASDAQ (2002), the New York Stock Exchange (2005), Bolsas y Mercados Españoles and the São Paulo Stock Exchange (2007). The Shenzhen Stock Exchange and Shanghai Stock Exchange stock exchanges can been characterized as quasi-state institutions insofar as they were created by government bodies in China and their leading personnel are directly appointed by the China Securities Regulatory Commission

Other types of exchanges

In the 19th century, exchanges were opened to trade forward contract on commodities Exchange traded forward contracts are called futures contract . These [[commodity exchange]]slater started offering future contracts on other products, such as interest rates and shares, as well as option (finance) contracts. They are now generally known as futures exchange .

Gallery

File:Paternoster Square.jpg|London Stock Exchange Image:NYC NYSE.jpg|New York Stock Exchange File:TSXExchangetower.jpg|Toronto Stock Exchange File:Sydney Exchange Centre Entrance.jpg|Sydney Stock Exchange File:Palazzo_mezzanotte1.jpg|Milan Stock Exchange Image:Boerse Frankfurt front.JPG|Frankfurt Stock Exchange File:Palais Brongniart Paris.jpg|Paris Stock Exchange Image:Three Exchange Square.JPG|Hong Kong Stock Exchange Image:BolsaMadrid.jpg|Madrid Stock Exchange Image:Zuerich Boerse.jpg|SWX Swiss Exchange Image:Osaka-Securities-Exchange-01.jpg|Osaka Securities Exchange Image:São Paulo Stock Exchange Building.jpg|São Paulo Stock Exchange Image:BSE.jpg|Bombay Stock Exchange Image:101.portrait.altonthompson.jpg|Taiwan Stock Exchange Image:Shanghaistockexchange.jpg|Shanghai Stock Exchange Image:Monument To Immortality.jpg|Philippine Stock Exchange

See also

* Auction * Capital market * Commodities exchange * Financial regulation * International Organization of Securities Commissions * List of financial regulatory authorities by country * List of Swiss financial market legislation * Securities * Shareholder * Stag profit * Stock exchanges for developing countries * Stock investor * Stock market * Trader (finance)

Lists

* List of stock exchanges * List of stock market indices * List of marketing topics * List of management topics * List of economics topics * List of accounting topics * List of finance topics

Notes

* http://www.1mtx.com/markets-trades/en/main/markets/stock/lists/federations.php# Federations of Exchanges]

External links

* Category:Stock market Category:Stock exchanges ar:سوق الأوراق المالية be-x-old:Фондавая біржа cv:Тĕплĕх биржи cs:Burza cenných papírů de:Wertpapierbörse et:Aktsiabörs el:Χρηματιστήριο es:Bolsa de valores fr:Bourse des valeurs io:Borso it:Borsa valori he:בורסה לניירות ערך kn:ಸ್ಟಾಕ್ ಎಕ್ಸ್‌ಚೇಂಜ್ ka:საფონდო ბირჟა lo:ຕະຫລາດຫລັກຊັບ lt:Vertybinių popierių birža ml:ഓഹരി വിപണി ja:証券取引所 pt:Bolsa de valores ru:Фондовая биржа simple:Stock exchange sk:Burza cenných papierov th:ตลาดหลักทรัพย์ uk:Фондова біржа ur: سہامی منڈی vi:Sàn giao dịch chứng khoán bat-smg:Akcėju bėrža zh:证券交易所 lt;!-- -->

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