Importance of Stock Market
Importance,
functionand objectives of the stock market and its contribution to the economy.
There are stock markets in all countries of the world, but
- what is they made for ?
- what is their contribution ?
- why they are so important for any economy. ?
- Why is their ups and downs so important in the news every day?
After all, you will understand what happens in the stock market
importance, Functions and Objectives of the Stock Market
The stock market provides a platform for companies to raise money. It allows companies to trade shares publicly, and helps raise additional financial capital to expand by selling shares of their ownership to companies in the public market. The Stock Exchange provides liquidity to investors for trading in securities so that they can be sold faster and easily.
Importance of Stock Market for Companies and Investors
Companies issue shares so that capital can be raised for the business. Investors buy shares so that they can partner in the company's growth and profits and sell it at higher prices when the demand for that stock increases. The stock market provides a platform for all this to companies and investors. The importance of the stock market is the same for companies and investors.
Stock Market Offers Liquidity
Buyers and sellers are almost always available in a company after its shares are suggested in the stock market. The stock market is the platform on which there is always availability and liquidity of shares. This liquidity makes it easier for investors to invest and benefit from the stock market. There is no such liquidity in selling property and other properties.
Stock markets are the measure of the economy
The price of stocks and other properties is an important part of the dynamics of economic activity and can be an indicator of social mood. An economy where the stock market is growing can be considered as an emerging economy.
The stock market is often considered to be the primary indicator of the economic strength and growth of any country. Long-term rising stock markets indicate growing economic activity in the country and falling markets may mean that economic activity is shrinking.
restraint
Share prices may also affect domestic investment and consumption. Therefore, central banks such as RBI monitor the control, behaviour and smooth functioning of the financial system. In fact, keeping an eye on financial stability in the country is the main function of the RBI.
Easy transactions on the stock market
The exchanges also act as clearing houses for each transaction which means they collect shares from the seller and distribute it to the buyer and guarantee payment to the seller of the shares. In case the counterparty defaults on the transaction, the stock exchange eliminates the risk of the individual buyer or seller.
Growing investor interest in the stock market
Banks and stock markets together contribute to the prosperity of the financial
system in any country. According to statistics, share share in domestic investment in most countries has increased sharply in recent decades.
The growing stock markets in our country are giving similar signals. In recent years, the trend of youth in our country has increased in the face of SIP and mutual funds. This is also indirectly the way to invest in shares.
The importance of the stock market has become very important for the smooth functioning of the financial system of any country without which economic activities do not get speed. You also learn the stock market and get involved in the pace of growth.
Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you
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