Many countries worldwide have developed globally recognized stock markets. Stock Exchanges dot the major cities of these countries. New York City’s Wall Street (New York Stock Exchange) is the one destination that is synonymous with Stock Exchanges and is the world’s largest exchange. The other dominant members of the world stock market include: United Kingdom’s London Stock Exchange (LSE), Germany’s Deutsche Bourse Group, China’s Shanghai Stock exchange and Hong Kong Stock Exchange. The Stock Exchanges around the world are a wonderful barometer of the predicted financial health of both that country and also the world economy.
Stock markets are an integral pillar of economic growth. They are also a reflection of the financial profiles of listed companies. The trends of stock prices and stock market indices underscore the overall state of the global economy and financial health of listed companies. It is for this reason that stock market indices rise when the global economy blossoms and plunges when the global economy plummets. This nexus between the global stock markets and economic performance is important because it helps companies, creditors and investors make important decisions. For example, the high thresholds of listing at the global stock exchange markets give investors the confidence to buy stocks of their preferred companies.
Stock exchange listing is one of the most important phases of a company’s life cycle. This is because stock exchange listing involves stringent approval procedures that screen the operational thresholds and strategic financial management of a company. Any company seeking listing must meet the established qualification criteria for conducting an initial public offering (IPO) or a rights issue of shares at any given stock exchange market. Subsequently, successful entry into the world stock market brings with it many advantages. It becomes easier for a company to access a wide range of sources of finance; including both debt and equity. A listed company can raise additional capital by selling additional shares through a rights issue. Due to the extra financial transparency rules a listed company must adhere to, it assists companies raise debt to fund their operations.
Check out more about Brendt Munro at Berkeley Capital Asia. Brendt is highly active in providing structuring and practical corporate advisory services. This advice ranges from international structuring, business restructuring to effective strategic and corporate business planning. Brendt ensures his clients benefit from regular contact, intelligent insight and clear direction.
