- To check against inflation and currency depreciation.
- To facilitate equity financing.
- To improve corporate governance.
- To redistribute wealth.
- To create investment opportunities for small investors.
- A barometer for economic performance-i.e. how is economy performing or doing by closely monitoring the share prices.
- Provides a ready market (many buyers and sellers) for stock, shares, bonds, debentures etc.
- facilitates the flow of new capital into the industry
- Facilitates savings (encourages savings by individuals) –instead of saving your money in pyramid schemes).
- Protects investors by reasons of the rules of the securities exchange.
- Companies seeking capital are advised and guided by all stages.
- Investors are able to obtain capital from the public.
- It enhances the inflow of foreign capital. (it is open to foreigners).
- The title to any quoted security is transferred speedily and cheaply. (not complicated process e.g. C.D.S Account which is free).
- It Disciplines the company’s management by ensuring that the companies fulfill certain requirements and follow certain rule before securities are listed in the stock exchange.(to protect the consumers).
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