| The
stock market provides a market place for bringing together buyers and sellers
of the securities listed on it.The stock market is an organized market
that provides the facility of computerized trading in securities, the investors
in this market can earn or lose capital gains on their purchased securities
in addition to dividends paid by the issuing companies. The Stock Exchanges
today from an integral part of a country's capitals market. They are important
from the view-point of capital formation as they create market-ability
for the initially issued securities by providing a secondary market
for trading. The development of a vibrant equity or stock market is essential
for strong economic growth and development. It complements and supports
the productive activities of the economy by performing an important function
of mobilizing and allocating savings for the long term funding requirements
of business and industry.
This enables the
commercial and industrial base to expand, creating opportunities and increasing
per capita income and G.N.P. Stock markets are often referred as foundations
of the national economy. Here the stock holder are in fact owners of corporate
and their interest is measured in terms of units of participation called
share.
In the stock markets,
rights of ownership are marketable and transferable. Each individual share
certificates represents a legal claim on future earning of the respective
company. The owner of share certificates are entitled to certain privileges
defined in memorandum of Article and Association of the companies as well
as the country companies Law's. Typically, these includes the rights to
dividends, rights to effect directors and approve fundamental corporate
changes, inspection of books of the company and less frequently the pre
emotive rights to subscribe the new issue of shares.
The stock market
facilitate the buying & selling of shares and help in clearing and
settlements of the transactions.
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