Introduction to Stock Market

What is a stock market?

The stock market is a central market place for raising funds by Governments and various corporations to expand their businesses and shareholding base.

What is a stock exchange?

The role of a stock exchange is to provide a fair and internationally competitive market place for the trading of financial securities for the benefit of all participants (both Listed Companies, Institutions and small investors).
All countries who have a local stock exchange aim to provide a market place whereby:
Companies and Governments can raise funds, and
Investors can invest

What is a Stocks?

A stock is a basic unit of ownership in a company.
When you buy a share, you become a part-owner of a company.

Ownership of that company is divided into millions of parts. These parts are called shares and each person who buys a share is a shareholder.
The directors of the company are employed to manage the business, but the company is wholly owned by its shareholders.

When a company is founded, it often progresses and develops and often to expand, it requires financial help. The company can opt to borrow funds from the bank and pay interest like a loan or they can opt to raise funds by becoming a listed company on the share market.