Financial Investment At The Stock Market Essay

Financial Investment At The Stock Market Essay

Length: 1382 words (3.9 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

QUESTION 1 (i)
Security markets refer to any type of financial investment at the stock market. A security market encompasses; equity markets, bond markets, and derivatives markets. Only a few companies in East Africa are enlisted at the stock exchange due to the technicalities of listing companies and the disadvantages that comes with it. Enlisting a company at the securities exchange market has advantage and disadvantages. The following are some of the advantages and disadvantages of enlisting a company at the securities exchange market;
Advantages of Enlisting a Company at the Securities Exchange Market
(a) Free Coverage and Publicity;
Enlisting a company at the securities exchange market gives a company free coverage and publicity. Every day in our news channels we get to know which companies are gaining or loosing at the stock exchange market. This makes a company to be known to new potential customers and give confidence with the existing customers thus translating to more business for them without having to pay for advertisement. Since advertisement is very expensive, it saves a company a lot of finances which could have otherwise be spent on advertisement.
(b) More Access to Capital;
When a company gets enlisted at the stock exchange market, more capital is acquired from the initial public offer (IPO) or subsequent issues. This additional capital can be used by the company to expand the business, marketing, research and development, advertisement and many more. Instead of companies borrowing money from the bank and other financial institutions which is more expensive, listing the company at the stock exchange market solves this problem.
(c) Helps Companies to do Business Easily;
It is easy for companies which are listed ...


... middle of paper ...


...ld want to enlist their companies at the stock exchange market in East Africa because most of the companies are not very serious to keep up to date financial records especially when they start their businesses. Additionally, some companies hire cheap and incompetent accountants to keep their records when they start their business as the money needed to pay qualified accountants is not available at that time.
(e) Size of the Company and Status of the Shares
There is a set requirement of the minimum asset size and minimum paid up share capital for companies seeking to be enlisted at the stock exchange markets in East Africa. Some of the companies in East Africa do not meet this requirement posing a barrier for them to be enlisted at the stock exchange market. The shares must freely transferrable and there should be no restrictions in the buying and selling of shares.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Payment Of Good Dividends Essay

- of 2015. The payment of good dividends is a reason enough for investors to put their money in Apple stocks. The dividends were paid as regular cash payouts. The payment of dividends shows how much the company is committed to stock holders’ investment and is focused on making returns on the investments (Benzinga Editorial, 2012). The last rule is about investing in companies that either that fit into the investment framework by either pullback or when the market is breaking out from big consolidation area or base....   [tags: Investment, Financial ratio, Stock market, Stock]

Better Essays
1465 words (4.2 pages)

Essay on Security For Financial Market Investment

- These are the most known security for financial market investment. This type of security represents the practice of ownership in a specific company. The fact is that ownership of particular firms end up being divided within a number of stocks according to shares. Stocks tend to share a tiny fraction of any firm. The stock holds a tiny fraction of ownership of the firm whereby it holds itself in such a right position to take part in the decisions of the firms. Net profit in a company is divided in two destinies such as through investment of the profits on the firm....   [tags: Stock, Stock market, Mutual fund, Stock exchange]

Better Essays
1012 words (2.9 pages)

Swot Analysis Of Stock Market Investment Strategies Essay

- Investing successfully is the key to reaching one’s long-term goals. Whether one has some money set aside to begin investing, or one has just come into a large lump sum of money, there are many ways to go about investing the money. There are several mainstream ways to invest that can work for both professional in the field or a novice, but one needs to weigh the risks associated with the probable gains. The point in the many ways to invest is that, no matter method one chooses to invest, the method should work so that it can earn one additional profit....   [tags: Stock market, Investment, Finance, Bond]

Better Essays
849 words (2.4 pages)

Technical Analysis : International Financial Market Essay

- Having a well crafted binary options trading strategy is an asset for traders. It will help them to overcome any unexpected events on the financial market. The sector of binary options is very volatile hence it is difficult to have a unique strategy that will fit in all situations. However the trader can follow certain rules that will guide him throughout his trading journey and that may help to maximize his returns. Monitoring the Financial Market Monitoring the financial market is one of the most important strategies each trader should adopt while speaking of trading online....   [tags: Stock market, Finance, Investment, Economics]

Better Essays
828 words (2.4 pages)

The Financial Market Is Defined As The Method Of Separating One 's Money

- 1. Diversification in the financial market is defined as the method of separating one 's money in many different investments. The ability to hedge the portfolio can allow securities to gain both when markets "boom" and returns break in one area. Diversification intends to maximize profits by financing in several sectors that respond separately to the same event. For example, an investor who invests all their money in a high-tech stock, it is taking an enormous risk with his/her money if the value of the stock drops dramatically....   [tags: Investment, Stock market, Stock, Finance]

Better Essays
707 words (2 pages)

History Of Financial Markets : Saudi Arabia 's Capital Market Essay

- History of Financial markets: Saudi Arabia’s capital market is considered to be young compared to other financial markets in the region. Saudi financial markets have been developing slowly because most enterprises in the country are either government owned or family-owned, most of which was funded through state budget, and as a result reduced the need for financing. In the recent past, Saudi Arabia has focused on a careful measurement for structural developments and regulatory changes. However, different phases of historical development of the capital market which can be classified into three phases; pre-industrialization phase, post industrialization phase and growth phase that sparked ch...   [tags: Stock market, Investment, Saudi Arabia, Stock]

Better Essays
1215 words (3.5 pages)

Essay on Career And Future Growth Of A Financial Analyst

- I am currently majoring in Finance at Carlson School of Management, and I have decided to explore the career and future growth of a financial analyst. I chose to explore this career because some of my cousins work in this field and I’m interested in numbers and analysis. I also have an interest in following the stock market and working in a stimulating environment. What sets me apart from others is that I’m able to use time management efficiently. I’m able to study and complete major assignments while still finding plenty of time to socialize with others....   [tags: Investment, Finance, Stock market]

Better Essays
799 words (2.3 pages)

Investment Risk In Stock Market Securities Essay

- Investment Risk in Stock Market Securities Introduction: Stories of people making fortunes from the securities market have enticed many others into risky investments. Congress created the Securities & Exchange Commission (SEC) to protect investors. Many corporation managers became greedy and made self-serving decisions that created the principle-agent problems. The solutions for these problems lead to more unethical behavior from management. The creative use of financial statements even tricked analysts and brokers....   [tags: Investment Stock Market Accounting]

Free Essays
1259 words (3.6 pages)

The Financial Markets Of The Gcc ( Gulf Cooperation Council ) Essay

- In July of 2014, the most important event of in the history of the financial markets in the GCC (Gulf Cooperation Council) has been announced. Saudi Arabia has approved to open its equity market to direct foreign investment and CMA has drafted rules for Qualified Foreign Institutions. Its equity market (Tadawul) valued around USD 530 billion and which will open an opportunity for the largest global investment funds to inject their funds into one of the most lucrative emerging markets. However, once the announcement hit the news, Tadawul market index hit the 10,000-point for the first time in six years as the market react with optimism over the news....   [tags: Investment, Stock market, Saudi Arabia, Finance]

Better Essays
1513 words (4.3 pages)

Financial Ratios And The Stock Price Essay

- Investors usually compare between the amount they have to spend and the expected return from their investment. If there is a significant benefit, they intend to invest more in a company. Consequently, they monitor the interested company’s performance regularly and do the comparison with others in the same industry. In Lewellen (2004) research, he said that financial ratios like earnings per share, price earnings and dividend ratios can be used for prediction return. As per the paper, if the share is overpriced, the ratios are low and therefore the estimated future return will be low....   [tags: Financial ratio, Stock, Stock market, P/E ratio]

Better Essays
1125 words (3.2 pages)