Nowadays, Investing one’s money is often the smartest way to make your money work for you.
However, you must understand the stakes, seek advice and be better prepared for the investing world.
One might get confused wondering what the stock market is, especially when you try to ascribe contextual meaning to it. Perhaps a clarification might suffice as we look into the Australian stock market news.
The term stock market put simply, is the meeting of sellers and willing buyers for equity shares of a publicly held company
In terms of how they are conducted, most of their activities in the market are through over-the-counter marketplace methods or in formal exchange.
THE AUSTRALIAN STOCK MARKET: HISTORY
Established in 1987, the Australian Stock Exchange Limited is as a result of an Australian parliament-approved legislation.
This legislation was passed to allow the amalgamation of 6 autonomous state-based stock exchanges.
Merging with the Sydney Futures Exchange in 2006, and becoming known as the Australian Securities Exchange, having its official name to be ASX Limited.
Hence, today In Australia there are two major markets; The Australian Securities Exchange (ASX) as well as the CBOE Australia.
By law stockbrokers in Australia are required to give both buyers and sellers access to the 2 markets.
There are 2 central tasks of the share market, in Australia :
- Regulating what can also be called a ‘primary market’; it lets companies generate money by allocating shares for sale, and…
- Regulating a ‘secondary market’; here investors are allowed to buy shares and then sell them at rates determined primarily by market forces.
There are over 2000 companies registered under the Australian stock exchange and counting.
These companies list on the stock exchange to raise money by selling off shares to prospective investors.
These shares can also decrease in value. The listing process for Australian Stock Exchange is seven-steps.
And these steps normally take about four to six months to get enrolled.
Investing in smaller companies is an even riskier investment, as they are more likely to go out of business than larger companies.
GOOD THING ABOUT THE AUSTRALIAN STOCK MARKET
The Australian Stock Market (ASX) having over 2000 listed companies is reported to have an average daily turnover of A$5 billion and a market capitalization of around A$1.6 trillion.
For a company to be listed on the Australian Stock Market news, it gives them access to capital and gives the business a thriving opportunity.
The liquidity of shares bought by investors from a particular company makes the company’s shares more attractive to potential investors.
ADVANTAGES OF THE AUSTRALIAN STOCK MARKET
- Listed companies get access to capital for growth.
- Value of the company increases.
- Higher public and investor profile.
- There is provision of a secondary market for the company’s shares.
- Listed companies get access to currency for external growth.
DISADVANTAGES OF THE AUSTRALIAN STOCK MARKET
- Duration for listing takes a long time.
- The cost of listing is rather high.
- There is reduced monopoly of control over ones company.
- The price of shares is affected by the overall market condition.
- Media exposure.
Conclusion
It is always best to gather as much knowledge about the market as you can before investing. We hope we’ve helped you out here.
