Stock Market Efficiency

The stock exchange is that government and industry can raise long-term funds, investors can buy and sell securities market. Demand for capital for investment funds and the growth of enterprises in overseas trade. Stock markets have prospered and expanded globally. New markets in developing countries join, comparable to the traditional stock market. Increase because it is very fast, it raises a few questions, such as what is the reason for the rapid growth of the stock market, what is the importance of this point? May be because more than 140 countries and regions in the stock market, they are due to the fact that most businesses can enter the stock of capital efficiency will generate a higher rate of return on shareholders is important.

Privilege to pay hundreds of companies listed on the stock exchange trading of the shares, rather than in other countries, as well as their local exchange. Most companies essentially floating its shares in the stock markets of other countries, to broaden the shareholder base, and invited a large number of investors subscribe for the shares; it may sell these shares at a higher price, so as to raise funds, the cheaper the price.

Another reason may be the domestic stock exchange is too small or company to limit its domestic securities market, they have no choice, only to obtain equity financing from abroad, therefore, to a large extent with a number of companies . For example, when the Ashanti Gold Mine, a gold mining company in Ghana, was privatized in the value of about $ 1.7 billion, which is more than ten times the capital Accra stock.

To raise awareness of the company is another strategy to increase the investment in the company. For example Standard Chartered listed on Bombay Stock Exchange as well as London Stock Exchange and Hong Kong to strength its brand.  Some companies also use this as a strategy to motivate the employees and to reward the employees with their shares so they can work hard to maximise the profits because if these shares are locally listed the share –ownership plans can be better managed and are more appealing to employees.

Social well-being of the modern financial knowledge of the stock market made a significant contribution. Them a wide range of individuals and institutions have great value. For depositors, they provide the environment; you can save the investment, protection and social returns generated in real productive assets. 's Own ability to absorb new financial bonds issued, allowing corporate expansion, innovation and value stocks to create wealth market. In my opinion there are many benefits to running a good Stock Exchange, for example, companies can find the funds and growth, the interests of the shareholders of the availability of rapid, inexpensive secondary market, if they want to sell shares of a company's public image to strengthen in the transaction quoted, because banks and other financial institutions have more confidence in listed companies, making it easier to finance at a lower cost.