equity market (Securities market), the turnover of the securities
equity market - one of the constituent parts of the financial market, where the turnover of the securities.
The main function of the equity market - is a security mechanism to attract investments in the economy. He connects those who have a surplus of income and who need the means. The performance of the function by the permanent maintenance of economic growth, the securities market provides for only in that case, if the inside of it there is free movement of investments. The name of such freedom - liquidity. The existence of liquidity is possible only if the number of buyers and sellers, in which will satisfy the requirements of demand and supply. In the developed capitalist countries provide liquidity by means of the legislation of the stock market.
This legislation requires the company (shares and bonds, which rotate on the stock market) provide investors with a meaningful, accurate and transparent information about yourself.
It also strictly regulates firms-market makers and companies-brokers according to the rules of work. Securities market provides a place for organizations that are in need of loan capital and a place for organizations, which it is delivered.
equity market, in the framework of the commodity economy, similar to the market of any other goods, because security is also the goods, on the other hand it has its own peculiarities, which connected with the specifics of the goods - securities. In the modern conditions of the securities market, the sector of the common financial market and therefore he has with the real sector of the economy that produces goods and services - there are differences.
Now the overwhelming number of securities on the securities market do not exist in a documentary, or in paper form, and in the so-called non-documentary, or paperless form. The rights of the owner of the securities, according to the rules of law, recorded in a special register, and the securities as «physical paper» no.
The growth of the securities market and the growth of the world economy are interrelated. The needs of commodity production has contributed to the emergence of a securities market, because the attraction of private capital and combining them with the help of stocks and bonds, allowed to create, develop new industrial economy and enterprises. Therefore, in all capitalist countries of the world, for the development of the economy, it was important to develop the securities market.
equity market is an integral part of the financial market, it overflows the capitals of some of the participants to other market participants. The difference between him and other sectors of the financial market (deposits, Bank loans, foreign exchange, money) first of all, are on your object, and the similarities between them are, in the way education market, in his attitude to the market of real benefits, the significance of the functions of the treatment. These markets are so close that a number of cases allows you to manage the security, as of the payment and settlement means (e.g. a cheque, bill of exchange). It should be noted that the bill or Bank draft became a consequence of the emergence of modern money.
In the securities market include: primary (basic) and secondary securities, state and non-state corporate securities. It covers national, regional and international markets.
The securities market - the Main streams
Raising capital on the securities market
For any commercial activity, an external source of raising capital - this is the stock market. Internal financial source of the work of the company or enterprise, usually of the total volume of financial resources in the average half or up to three-quarters of the necessary, in order to maintain and expand the circulation of goods and production. Other needs in financial resources shall be covered by external sources: the securities market and the market of Bank loans. There are assessments for which it is known, that 75% of external funding, received from the securities market.
Capital investment in the securities market
In order to get profit from the sale of securities, they need to find a buyer. Therefore, the market of securities at the same time is the object of investments monetary funds of the enterprise, organization and sector to increase the capital. As is known, the capital increase, that can be by means of Bank deposits (putting the money on a Bank account), by the funds of the foreign exchange market, or by means of investing money, in some productive activity (Antiques, real estate, etc.). Therefore, the securities market, there is competition, of which he is the other spheres of the application of capital, therefore, everything depends on the fact, what is its attractiveness from the point of view of market participant.
The system structure of the market of securities
System structure the securities market is very complicated. Divided it to the derivatives and cash; computerized and publicly; the exchange and over-the-counter; organized and unorganized; primary and secondary.
The specific features of the market of securities is different from the commodity market in volume and on the object. Security - it is a specific product. The ability to bring in the future income - this is the price of a security. Because of the continuity of the turnover of the securities market - it exceeds the volume of the market of the real goods (which also affects the way of formation of the market). The goods must be produced, and the securities of just issued. The goods are consumed, and the securities are issued with the purpose of treatment and prisoners in their income. In comparison with the market of services and goods, securities market is secondary.
The exchange market - here securities are traded, organized on the stock exchanges.
Over-the-counter market - here securities are traded, without an intermediary - a stock exchange.
In addition to shares, out of the exchange traded other types of securities. Stock market is an organized market, and over-the-counter is as organized market, as and unorganized. In countries with developed market economy, currently there is only an organised securities market, the presented to the stock exchanges or over-the-counter system of electronic trade.
Securities market depends on the type of trade and is divided into two main forms: public and computerized.
The public market or (voice market) - is the trading of securities, where there is a meeting of the sellers and buyers (usually stock intermediaries) in a certain place, then here is a vowel, a public auction or occurs an indoor bargaining (which must not be disclosed).
The computer market is the trading of securities by means of modern means of communication and computer networks. This market is characterized by a remote meeting of the sellers and the buyers. The location of computerized trading places are directly or from sellers and buyers, or in the offices of firms, which trade in securities. In this market there is no public nature of the process of pricing, the process of trafficking automated and on it goes continuous trading securities.
The securities market is divided into the cash and futures market, since there are terms for transactions with securities.
The cash market (market of «cache», the market of «spot») - in this market immediately performed the conclusion of transactions. Technically it happens that such performance is to stretch the term of up to 1-3 days, if you need security in the physical form.
The derivatives market of securities in this market there is a delay of execution of the transaction for weeks or months.
The large size has the cash market securities. And forward contracts with securities consist mainly in the derivatives market.
Depending on what kind of instruments traded on the market, it can be divided into money market and capital market.
Cash - on this market instruments traded for a period not less than 1 year (short-term bonds, Bank certificate, cheque, promissory note).
The market of capital (the investment market) - in this market instruments are treated for more than 1 year (long-term and medium-term bonds, shares).
