There are a number of functions to the stock market, which are not just limited to Kenya - in fact, they are true all over the world.
By buying and selling shares, a business can raise money, which is then pumped back into the development of the business. For example, money raised on the stock market may be invested in the development of new ideas, products or services. It may be invested in the marketing aspect of the business, in order to broaden the business's market. Or, it could be used to improve on internal features of the business, such as the computers or computer systems, or may be used to raise the wages of the staff.
Whether you are interested in the stock market or not, the existence and nature of the stock market means that information about the current state of the national and global economy is always available. While many people find the information provided by the stock market (such as which stocks have gone up in value, which shares have gone down) difficult to interpret, the public nature of the stock market provides an element of transparency to the industry, meaning that all people can use the stock market as they wish (or not at all).
The transparent nature of the stock market means that ordinary people can invest, buy and sell and make money out of the stock market. You don't need to have a degree in business or a Masters in economics in order to use your common sense and instinct and get involved in the stock market. Regular people have the opportunity to become very wealthy thanks to the stock market.
- Function one - the stock market allows businesses to raise capital
By buying and selling shares, a business can raise money, which is then pumped back into the development of the business. For example, money raised on the stock market may be invested in the development of new ideas, products or services. It may be invested in the marketing aspect of the business, in order to broaden the business's market. Or, it could be used to improve on internal features of the business, such as the computers or computer systems, or may be used to raise the wages of the staff.
- Function two - the stock market provides all people with information
Whether you are interested in the stock market or not, the existence and nature of the stock market means that information about the current state of the national and global economy is always available. While many people find the information provided by the stock market (such as which stocks have gone up in value, which shares have gone down) difficult to interpret, the public nature of the stock market provides an element of transparency to the industry, meaning that all people can use the stock market as they wish (or not at all).
- Function three - the stock market allows ordinary people to get involved
The transparent nature of the stock market means that ordinary people can invest, buy and sell and make money out of the stock market. You don't need to have a degree in business or a Masters in economics in order to use your common sense and instinct and get involved in the stock market. Regular people have the opportunity to become very wealthy thanks to the stock market.
