The importance of the Roles Played by the Stock Market Assignment

The importance of the Roles Played by the Stock Market - Assignment ExampleThe stock commercialize has so many roles that it plays and the various roles are of utmost importance as a primary marketand as a secondary marketin the cultivation of the economy. There are quite a number of the most stable, mature, and well performing stock markets around the world, for instance, London, Hong Kong and New York(Van Antwerp,W,1975) The roles that the stock markets perform are actu ally central to the development of any economy. By virtue of the primary markets being involved with new securities, this is where an investor interested in initial mankind offerings of any public guild and also government bonds can easily go find them. In such(prenominal) a market, securities are sold to investors directly from the selling company itself. This makes trading at the stock market faster and easier. In the London stock exchange for instance ,one of the most common traded securities are the munici pal bonds, this fundamentally entails the direct purchasing of debenture from the concerned authorities, for instance, the municipality. The London stock exchange put a lot of premium on these primary markets because to them, these markets are very important not just in strengthening the economy but also in as far as capital markets are concerned. The youthful world pecuniary crisis had, indeed, a great negative impact to the performance of the stock markets world over. The stock exchanges, for instance, does provide facilities related to issuance or repurchase of securities and many other like capital events, income payment anddividends. Securities that are traded on any given stock exchange may includesharesthat are provided by the unit trusts, companies,derivatives as well as investment products such as bonds(Giddy,1994) Stock exchange is, in most cases considered to be the most necessary segment of anystock market. The stock markets demand and supply is normally driven by so many factors which, in virtually all the fee markets, affect stocks price. In any country the financial governing body tends to fund other areas from the haves and their surplus funds to the ones with a shortage in funds, by direct market financing or indirect bank finance. A countrys financial system and markets matters a lot in as far as the frugal growth is concerned. The stock market plays a very big role in ensuring that the economy grows steadily. As much as some economists do not believe in the argument that the finance-growth kind of relationship between how well or bad the stock market is doing to the economic development.The economic development that is seen in any place always creates demands for certain types of financial arrangements, and financial system always tend to automatically respond to such demands. The stock market has natural mechanisms that help in addressing the issue of ensuring that a nation or a city has achieved what is considered to be the optimal fi nancial system outlook. Overall, the stock market stabilizes the financial system, together with other well-developed systems for instance a good legal system, and this is normally done by incorporating elements or aspects of direct market based finance and indirect banking based finance. A stable and well developed stock market ensures that that there is a stable and strong financial system in place