Stock market

Business project

By Aysil Islam 8 yellow IGCSE

Introduction
The main intention of this report is to outline and highlight the main
ideas of stock markets around the world for the business project. This
report will include :

What is the stock market

Understanding the stock market

How the stock markets work

What are the functions of a stock market

How the stock market is regulated

What is the significance of a stock market

What is an alternate trading system

Who helps an investor trade in the stock market

Stocks around the world

Stock market in ksa

Stock market in egypt

What Is the Stock Market?
The term stock market refers to several exchanges in which shares of
publicly held companies are bought and sold. Such financial activities
are conducted through formal exchanges and via over-the-
counter (OTC) marketplaces that operate under a defined set of
regulations.
Both “stock market” and “stock exchange” are often used
interchangeably. Traders in the stock market buy or sell shares on one
or more of the stock exchanges that are part of the overall stock market.
The leading U.S. stock exchanges include the New York Stock
Exchange (NYSE) and the Nasdaq.
KEY TAKEAWAYS
• Stock markets are venues where buyers and sellers meet to
exchange equity shares of public corporations.
• Stock markets are components of a free-market economy because
they enable democratized access to investor trading and exchange
of capital.
• Stock markets create efficient price discovery and efficient dealing.
• The U.S. stock market is regulated by the Securities and
Exchange Commission (SEC) and local regulatory bodies.1
FINRA. "Advancing Market Regulation and Transparency."

Understanding the Stock Market

The stock market allows buyers and sellers of securities to meet,
interact, and transact. The markets allow for price discovery for shares
of corporations and serve as a barometer for the overall economy.
Buyers and sellers are assured of a fair price, high degree of liquidity,
and transparency as market participants compete in the open market.
The first stock market was the London Stock Exchange which began
in a coffeehouse, where traders met to exchange shares, in
1773.3 The first stock exchange in the United States began in
Philadelphia in 1790.4 The Buttonwood Agreement, so named
because it was signed under a buttonwood tree, marked the
beginning of New York’s Wall Street in 1792. The agreement was
signed by 24 traders and was the first American organization of its
kind to trade in securities. The traders renamed their venture the
New York Stock and Exchange Board in 1817.
A stock market is a regulated and controlled environment. In the
United States, the main regulators include the Securities and Exchange
Commission (SEC) and the Financial Industry Regulatory
Authority (FINRA).21
The earliest stock markets issued and dealt in paper-based physical
share certificates. Today, stock markets operate electronically.
Though it is called a stock market, other securities, such as exchange-traded
funds (ETFs) are also traded in the stock market.

How the Stock Market Works

Stock markets provide a secure and regulated environment where
market participants can transact in shares and other eligible financial
instruments with confidence, with zero to low operational risk.
Operating under the defined rules as stated by the regulator, the stock
markets act as primary markets and secondary markets.6
CFA Institute. "Chapter 15, The Functioning of Financial Markets."
As a primary market, the stock market allows companies to issue and
sell their shares to the public for the first time through the process of
an initial public offering (IPO). This activity helps companies raise
necessary capital from investors.
A company divides itself into several shares and sells some of those
shares to the public at a price per share.6 To facilitate this process, a
company needs a marketplace where these shares can be sold and this is
achieved by the stock market. A listed company may also offer new,
additional shares through other offerings at a later stage, such as
through rights issues or follow-on offerings. They may even buy
back or delist their shares.
Investors will own company shares in the expectation that share value
will rise or that they will receive dividend payments or both. The stock
exchange acts as a facilitator for this capital-raising process and
receives a fee for its services from the company and its financial
partners.6Using the stock exchanges, investors can also buy and sell
securities they already own in what is called the secondary market.
The stock market or exchange maintains various market-level and
sector-specific indicators, like the S&P (Standard & Poor’s) 500
index and the Nasdaq 100 index, which provide a measure to track the
movement of the overall market.

Following an IPO, the stock exchange serves as a trading platform for

buying and selling the outstanding shares. This constitutes the
secondary market. The stock exchange earns a fee for every trade that
occurs on its platform during secondary market activity.6

What Are the Functions of a Stock

Market?
The stock market ensures price transparency, liquidity, price discovery,
and fair dealings in trading activities.
The stock market guarantees all interested market participants have
access to data for all buy and sell orders, thereby helping in the fair and
transparent pricing of securities. The market also ensures efficient
matching of appropriate buy and sell orders.7
Stock markets need to support price discovery where the price of any
stock is determined collectively by all of its buyers and sellers. Those
qualified and willing to trade should get instant access to place orders
and the market ensures that the orders are executed at a fair price.
Traders on the stock market include market
makers, investors, traders, speculators, and hedgers. An investor may
buy stocks and hold them for the long term, while a trader may enter
and exit a position within seconds. A market maker provides necessary
liquidity in the market, while a hedger may trade in derivatives.

How Stock Markets Are Regulated

Most nations have a stock market, and each is regulated by a local
financial regulator or monetary authority, or institute. The SEC is the
regulatory body charged with overseeing the U.S. stock market.
The SEC is a federal agency that works independently of the
government and without political pressure. The mission of the SEC is
stated as “protecting investors, maintaining fair, orderly, and efficient
markets, and facilitating capital formation.”8
Companies listed on the stock market exchanges are regulated, and
their dealings are monitored by the SEC. In addition, the exchanges set
certain requirements such as mandating timely filing of quarterly
financial reports and instant reporting of relevant corporate
developments, to ensure that all market participants are equally
informed.
Failure to adhere to the regulations can lead to suspension of trading
and other disciplinary measures.
What Is the Significance of the Stock
Market?
The stock market is a component of a free-market economy. It allows
companies to raise money by offering stock shares and corporate bonds
and allows investors to participate in the financial achievements of the
companies, make profits through capital gains, and earn income
through dividends. The stock market works as a platform through
which savings and investments of individuals are efficiently channeled
into productive investment opportunities and add to the capital
formation and economic growth of the country.

What Is an Alternate Trading System?

Alternative trading systems are venues for matching large buy and sell
transactions and are not regulated like exchanges. Dark pools and
many cryptocurrency exchanges are private exchanges or forums for
securities and currency trading and operate within private groups.

Who Helps an Investor Trade on the

Stock Market?
Stockbrokers act as intermediaries between the stock exchanges and
the investors by buying and selling stocks and portfolio managers are
professionals who invest portfolios, or collections of securities, for
clients. Investment bankers represent companies in various capacities,
such as private companies that want to go public via an IPO or
companies that are involved in pending mergers and acquisitions.
Stocks around the world
Biggest Gainers Biggest Losers
VIX BOVESPA
2.57% -0.87%
VIX BOVESPA
12.76 131,610.00
NIKKEI 225 IBC
1.50% -0.68%
NIKKEI 225 IBC
35,577.11 55,762.90
RTS IBEX 35
1.47% -0.62%
RTS IBEX 35
1,131.92 10,004.90
Hang Seng S&P/TSX
1.27% -0.34%
Hang Seng S&P/TSX
16,302.04 20,918.40
AEX OMXS30
1.01% -0.24%
AEX OMXS30
782.36 2,336.25
Stock market in ksa
Saudi Exchange (Arabic: ‫ )ﺗداول اﻟﺳﻌودﯾﺔ‬or Tadāwul (Arabic: ‫ )ﺗداول‬is
a stock exchange in Saudi Arabia. Tadāwul was formed in 2007 as a
joint stock company and the sole entity authorized to act as a securities
exchange in Saudi Arabia, but trading began in 1954 as an informal
financial market. It continued as such with only 14 listed companies
through the 1970s and began to acquire some formal status as the Saudi
Company for Share Registration in 1980. It is regulated by the Capital
Market Authority but has become partially self-regulating since 2018. It
lists 203 publicly traded companies (as of 31 December 2020). As of 31
December 2020, its trading hours are 10:00AM to 3:10PM, Sunday to
Thursday.[3][4]
On 26 February 2017, the Saudi Parallel Market (Nomu) was launched
as a parallel equity market with lighter listing requirements to provide
companies an alternative platform for the public listing.[5][6]
Tadāwul is completely owned by the Saudi Public Investment Fund.[7]
Stock market in egypt
The Egyptian Exchange (EGX), Egypt's stock exchange, comprises
two exchanges, Cairo and Alexandria, both governed by the same board
of directors and sharing the same trading, clearing and settlement
systems. Presently, the chairman of the Egyptian Exchange is Rami El-
Dokany.
Transactions taking place in the stock exchange are not subject to
capital gains tax. Dividends distributed by companies listed on the
exchange to shareholders are also not subject to income tax. However,
in 2013, a 0.001 percent tax on all stock market transactions was
imposed.[3] In 2013, the Ministry of Finance announced that the
government intended to repeal a 10 percent capital gains tax imposed on
mergers and acquisitions the year earlier, as well as a planned tax on
cash dividends, and refund investors who paid it.[4]
The Egyptian stock exchange plummeted 6.25% following the beginning
of the Egyptian revolution of 2011on 25 January.[5][6] It closed at the
end of trading on 27 January after the benchmark EGX 30 Index
(EGX30) plunged 16 percent that week amid the uprising. The
exchange reopened on Wednesday 23 March after being closed for
almost 8 weeks. The market fell by a further 8.9% on reopening.[7]
The Egyptian Exchange is a member of the Federation of Euro-Asian
Stock Exchanges.
Thanks