The history of the stock market is a thing of the past. Already in the 13-14 centuries promissory note markets and periodic fairs were actively working. They act as a kind of prototype of the modern securities market. The first operations conducted with securities took place in the 16th century, it was then that the first exchanges began to appear in Lyon and Antwerp. The stock exchange and stock market in the modern sense were established at the end of the 16th century, in parallel with the emergence of joint-stock companies.
An excursion into the history and acquaintance with the concept of the stock market
The oldest is the stock exchange in Amsterdam, which began operating in 1611. It was she who became the first place where margin operations and derivatives transactions REPO and DEPOT were practiced. The culmination in the development of the international stock market was the opening of the stock exchange in New York. It was on it that the first ever investment mechanisms in history were first developed and implemented. It became the basis for the formation of multibillion-dollar financial empires, in particular Rockefeller.
The stock market is an integral part of the capital market, amenable to regulation, providing the opportunity to trade in securities not only on the stock market, but also on the OTC. Consequently, the concepts of “stock market” and “securities market” are by and large synonymous. The international stock market is a collection of markets of all countries that are integrated into a single whole and allow for financial manipulation of securities. It can be concluded that the international stock market is nothing more than an integral part of the global capital market, which, in tandem with the money market, is essentially a global financial system.
Who takes part in the life of the market and what operations are carried out on it
The global stock market belongs to the category of supranational structures. It integrates the stock markets of all world countries. At that time, when either private individuals or legal entities act as participants in domestic markets, the states themselves are represented on the international platform as trading participants. Almost all participants in the global economy have access to the platform, and their location does not affect this fact, which automatically makes the market both global and universal.
The stock market is to some extent the tandem of financial institutions. This is a multinational company, and international stock exchanges, and brokerage houses, and dealers, and government agencies, and financial institutions. Institutions such as banks, insurance agencies, public financial services that can influence the movement of the market also take part in market life. All operations performed within the market can be differentiated into two categories. Commercial manipulations are mutual settlements between the parties for export and import operations. Financial manipulation is the flow of capital between the most diverse sectors of the economy.
Market separation: primary and secondary market
The stock market can be called an institution or a mechanism that provides the basis for interaction between buyers, bearers of demand, and sellers, acting as suppliers of values. The stock market can be divided into primary and secondary. Each subtype of the institute performs a clear list of tasks.
Primary market
The primary market is a market for stocks and bonds, short-term bonds of the state type and bonds of the state loan, federal loan. The concept includes the market for foreign currency bond bonds and treasury bonds, a gold certificate with financial instruments. According to the law, the primary market is defined as the relationship that is formed when issuing in the aspect of investment securities or during the implementation of civil and legal transactions between persons who have assumed the full range of securities obligations, and investors, professional participants in the financial industry or their representatives.
The primary market can be called the market of the first or repeated issues of securities, in the framework of which their primary distribution between investors is realized. Information on securities, including prospectuses, registration and control by government bodies, inclusive, is completely open to investors, which allows a rational and deliberate choice of the latter.
The primary market is presented in two formats. This is a private placement, with its characteristic sale of securities to a strictly limited number of investors, previously determined (without a public offer), and a public offer, which is carried out by publishing a public announcement (includes the sale of shares to an unlimited number of investors).
Secondary market
The secondary financial and stock market includes stock exchanges and stock departments of commodity exchanges for pre-issued shares and financial instruments. The concept implies the relations that are formed during the rotation of previously issued securities within the primary securities market. The secondary market is based on operations that reinforce the redistribution of the spheres of influence of foreign investment, with individual speculative operations inclusive.
The secondary securities market is divided into an organized (or exchange) market and an unorganized or over-the-counter (street) one. The secondary stock market provides stable structured restructuring of the economy in order to increase its efficiency. It is mandatory for the existence of a securities market, as is the primary one. A characteristic feature of the institute is its liquidity, which is becoming an aid for successful trading and for the ability to absorb a large number of securities in a short time. At the same time, rate fluctuations remain at an insignificant level, and implementation costs are minimal. The mechanism of trade in the secondary market ensures the stability of the market itself and limits speculation.
Why do we need a stock market
The stock market is a universal financial structure that affects many areas of activity. The institute influences business, as it is essentially the easiest way to get finances for the development and prosperity of a young corporation. When a start-up company sells stocks, a share of ownership, it gets into its hands capital, which is not necessary to return and on which it is not necessary to pay interest, as is the case with obtaining a loan from a bank. Stocks circulate in money not only with great speed, but also with big dividends.
Stock prices, which are largely formed by the stock market participants themselves, have a direct impact on the state of the economy and act as an indicator of social sentiment. An economy in which the stock market is developing is considered to be developing, and the country is strong and prosperous. Trading in the stock market offers chic prospects for ordinary people. Bidders who do not have large capital can become co-owners of shares in large global concerns and in the future receive stable income from them.
Domestic stock market
The Russian stock market until recently, over the past four years, has shown active growth, which emphasized its dominant role in the development of the state economy. At the first stages of its development, the market played the role of property distribution within the country, today its main purpose is to attract foreign capital to the Russian economy. At the moment, the capitalization of the domestic stock market is $ 498 billion, which is 80 percent of the country's GDP.
Experts predicted that, despite the crisis, in 2015 the market capitalization will be increased by 2.5-3 billion. In fact, the situation has only worsened, and the entire stock market today is cheaper than Apple shares. Statistical analyzes clearly show that the development potential that the Russian stock market has not yet been exhausted. The prosperity of the institute is a prerequisite for ensuring a sufficiently high level of competitiveness in the battle for the material resources of global investors in the international stock market. Not only individuals are interested in the development of the market, but also enterprises that wish to attract investment through bond loans.
2015 domestic stock market
The Russian stock market has serious problems associated with problems in the legislation, with a low level of development of investor activity, with the lack of value of companies and the lack of corporate culture. Moreover, according to world experts, the Russian stock exchange is currently classified as the worst in the world, despite its good potential. This fact is evidenced by the RTS dollar index, which since the beginning of 2014 has fallen by more than 50 percent.
Only things are worse in the Ukrainian, Portuguese and Greek markets. The ruble is systematically weakening against the dollar. The latest figures after the auction were recorded below the mark of 60 rubles, which is the largest intraday drop since 1998. The statement of the Central Bank, which announced the forecast for next year, based on the oil price of $ 60 per barrel, which absolutely does not correspond to reality, pushed the currency to fall. Investors are losing interest in the Russian market, which is reflected in the state of the economy.
America's stock market
In contrast to the situation in which the Russian stock market is today, its American counterpart is considered the most liquid in the world. Within its framework, securities are traded by the largest world companies. This is not only the shares of corporations and securities of foreign organizations, but also depositary receipts, exchange funds, and many other instruments. The American Stock Exchange in New York serves as a platform for second-rate securities transactions. At the first stages of its development, the exchange was presented in the format of an open-air area on Wall Street, where transactions were concluded. Only in 1921, the trading area moved to a covered building
To be able to invest in the US stock market, you need to open an account with one of the brokers, which is focused on providing services to traders from Russia. Each broker has specialists who will tell beginners what and how to do. A rating of stock market brokers indicates that it is preferable to cooperate with companies such as Finam and Capital Management, Insta Trade and United Traders, INVEST. These are brokers who, according to a number of criteria, were identified by the best world agencies as the most reliable.
