The presence of stock markets to influence the abilities of the financial institutions in the share pricing and the overall decision-making powers for the benefit of the shareholders have been synonymous. Thus increasing the market value of the company, with new opportunities for raising the working capital has been a key element in how the stock of the company fares in the financial markets.
Role of Stock Markets
In the Economy –the functionality and the utility of a stock exchange are universal, there are exchanges in almost every country that have a well trading network, with the advent of technology, there are no geographical boundaries limiting the trading with other countries. The important point is these stock markets are the pillars of building the wealth and investing responsibilities of the nation.
- the dependence on geographical limits are no longer essential, hence there is no biasness of the preferential way of trading only in selective stock exchanges, financial institutions have stood to gain immensely
- raising the capital for the business is important, and stock markets serve as the right place for the emerging as well as established enterprises to seed in their capital requirements, with unique financial products like the initial public offer, bonds, securities issued by government organizations to float and secure the required capital to operate the affairs of the company
- investor protection, their servicing is another element that has tied the financial institutions with the stock markets, it is the constant monitoring of the funds that gives the kind of profit that the investors are looking for in the volatile markets
- stock exchanges provide the economy to maximize on the dividend earnings, with a measure of assurance, diverse opportunities, flexibility and the insights on the performance of a set of stocks that investors have invested
- the nations GDP health is a direct indication of how well the economy is thriving, the performance of the stock markets are direct indicators, hence they have the high volatility and the momentum that any kind of social, political changes impacts the prices of the stocks and the performance of the funds issued by the companies
- the in investors are interrelated with the performance of the stocks where they have invested heavily, the systems implemented by the stock markets are highly accountable for the money that investors have poured in for the capital requirement expect a credible performance
The changes in the stock markets hugely affect the economy overall, as the prices of stocks fall, the consumers lose interest and look for safer and better performing stocks, thus letting the price of the original stock invested to fall, the market correction, performance are driving forces for the economy publish a good fiscal growth. The high net worth individuals are using the stock markets to pump in the required for cash strapped companies and thus have made it a cycle of funds that influence the pricing of the stocks in general. The fusion of the financial needs with the robust capital procuring stock market has influence to proceed in the stock ecxchanges.