Today we will tell you in detail about the stock exchange and then we will explain to you in detail about the stock exchange and comedy exchange. Please read our post carefully. If you read this post you will know in great detail about a stock exchange then you also do business with the stock market.
If you want to know about the stock market and want to business in it, so do not forget to read this article. In this article, we share all information about the stock exchange. This is also the best business many of the people around the world doing business with this. We recommended you if you want to earn money in a short time, you should do this business.
It is an organized auction market for the purchase and sale of securities.
Stock market deals in long – term capital in the following forms:
- Share capital i.e. shares, stock
- Long term loans, bonds, debenture
The stock market is not the provider of capital, but it provides a platform for raising capital and transferring of shares and bonds. Usually, Stock Exchanges are organized as a company limited by guarantee. They are non – profit organizations. They are governed by a board of directors, the board of governors, or board of trustees who are elected by members.
Features of Stock Exchange
Increase in Capital Formation:
The stock exchange plays a very effective role in increasing the rate of capital formation in the country. It attracts people to invest their savings in securities and bonds.
A stock exchange provides an organized market to the speculation and investors in industrial business A person can easily convert his shares into cash.
A stock exchange provides working facilities to the jobbers and other members to perform their activities in the stock exchange. So it also increases the rate of employment in the country.
Stock exchange indicates about the economic condition of the country . If the prices of shares are raising it means the economy is improving its condition. On the other hand, if prices of shares are falling it shows the downfall of the economy. In recent years Karachi Stock market ( KSE Index shows better performance and record an increase in the KSE 100 index because of economic development and GDP growth.
Increase in Government:
Fund The government can collect the funds by selling its securities in the stock exchange. The government can complete the various projects through this source.
Improve The Habit Of Saving:
Due to this facilities public is attract to investment in this market. People save money and increase investment. Companies use their capital and earn a profit, which distributes among the shareholders and ultimately increases the National Income.
Stock exchange improves the trade, commerce, and industry in the country. Finance is consider as the blood of the industry. So due to the capital facilities industry expands.
Facilitate The Banking System:
Banks and other financial institutions purchase a large number of securities from the stock exchange. These securities from the stock market can be turn into cash at any time. So it facilitates the banks to maintain their liquidity.
It has been variously described such as the barometer of adversity and prosperity of a nation the nerve center of finances and politics of a nation and as the mart of the world. All changing political, economic, and industrial conditions of the nation are reflected in the stock exchange. Its business is the business of businesses. It is equally beneficial to investors, traders, bankers, and government. It serves as a pivot of the money market and fortress of capital. Therefore stock exchange is an important organization in a capitalistic economy.
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Difference Between Stock Exchange And Commodity Exchange
“A stock exchange is an organized auction market for the purchase and sale of securities.”
The stock market is not the provider of capital, but it provides a platform for raising capital and transferring of shares and bonds.
Usually, It is organize as a company limited by guarantee. They are non – profit organizations. They are governed by a board of directors, the board of governors, or board of trustees who are elected by members.
Examples: Some of the famous stock exchanges around the world are:
- New York
- Bombay Stock Exchange etc.
Commodity Exchange is the place where principal buyers and sellers meet to strike business deals The business is transacted in line with the prescribed set of rules. In certain markets or exchanges, only members are allowed. This market or exchange deals with goods and services. Goods may be in the form of raw material, semi-finished goods, finished goods, and bullion.
Kinds of Commodity Exchange
Raw material Exchange:
This exchange deals with the goods in raw forms like jute, cotton, silver, oil, gold, wheat, leather. Its examples are the Karachi Cotton Exchange New York Cotton exchange Kuala Lumpur Rubber Exchange etc.
Semi – Finished Or Finished Goods Exchange:
This exchange deals with semi-finished and finished goods like cotton, leather, flour, rice, etc.
Bullion exchange includes gold, silver, and sovereigns. Its examples are Karachi Bullion Exchange, Bombay Bullion Exchange. New York Bullion Exchange, London Bullion Exchange, etc. In India, there are 35 commodity exchanges that deal with several oils and oilseeds, fibers, tea. peeper, castor seed, and turmeric and have been allowed futures trades in them. The commodity exchanges deal in futures to benefit farmers, stakeholders, consumers, and exporters.
From the above discussion, we can conclude that the main difference between the Stock and Commodity Exchanges is that in Securities ( Shares and Bonds ) are bought and Sold butin Commodity Exchanges Commodities like Jute, Cotton Rubber, Bullion, etc are bought and sold.
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