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Saturday, January 7, 2012

Basic Functions of a Stock Market

From a broader perspective, the stock exchange closes the gap between borrowers (private companies) in need to borrow money for a period of time or to raise permanent capital, and investors (households, private companies and government) who wish to invest their surplus money.

The stock market is one of the market facilitating the flow of funds between various sectors comprising the firms, households, government and overseas.

The stock market increases the investment options available to individuals and institutions, which results an increase the quantity of funds available to to finance industry. It also directs the flow of new savings against investment industries.

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