A Stock exchange is a corporation or mutual organization which provides trading facilities for stock brokers and traders, to trade stocks and other securities. It may be a physical trading room where the traders gather, or a formalised communications network. Creation of a stock exchange is a strategy of economic development. Stock markets may affect economic activity through the creation of liquidity. Liquid equity markets make investment more attractive because they allow savers to acquire equity and to sell it quickly and cheaply. At the same time, companies enjoy permanent access to capital raised through equity issues. It has been found that countries that open stock markets grow faster, on average, than the control groups.[1]
Market liquidity may also hurt economic growth, because they make it easy for dissatisfied investors to sell quickly.[2] In addition, issuing shares involves loss of company control, typically to already powerful investors. Foreign ownership of securities and assets is often unappealing.[3] Extremely low income levels keep share ownership beyond the reach of most people in developing countries.
Countries without a stock exchange are Tanzania and Democratic Republic of the Congo.[4]
The Mongolian Stock Exchange as of 2006[update] was the world's smallest stock exchange by market capitalisation.[5][6]
In 1688, the trading of stocks began on the London stock exchange.
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The Angolan Stock Exchange is a proposed stock exchange in Angola. First announced in 2006,[7] the Stock Exchange was hoping to open during the first quarter of the 2008 fiscal year,[8] though in August 2008 Aguinaldo Jaime said that the launch would be "a task for the next government... maybe late 2008 or the beginning of 2009".[9]
Afghanistan Stock Exchange is part of the planned Economic development of Afghanistan. It will operate Afghanistan's first liquid exchange to offer the most diverse array of financial products and services. AFX will bring together cash equities exchanges and foreign exchanges, to be the leader for listings, trading in cash equities, equity and interest rate derivatives, bonds and the distribution of market data in Afghanistan.
The Maldives Stock Exchange, is a private sector Stock Exchange in Malé. It was first established on 14 April 2002. It is very small, with only 4 companies listed.[10]
The Iraq Stock Exchange was incorporated and began operations in June 2004.[11] It operates under the oversight of the Iraq Securities Commission, an independent commission modeled after the U.S. Securities and Exchange Commission. Before the 2003 invasion of Iraq, it was called the Baghdad Stock Exchange and was operated by the Iraqi Ministry of Finance. Now it is a self-regulated organization like the New York Stock Exchange, owned by the 50 or so member brokerages.[12] The trading floor is now open six hours a week.[13]
Trading is done with pen and paper. Buyers shout at or call into their brokers, who stand their white dry-erase boards that list each company's share buy and sell price. This continues despite plans to implement electronic trading.[14][15]
Trading was suspended for several months in 2006 due to violence,[14] and is subject to power outages.
The ISX opened to foreign investors on August 2, 2007.
The Dar es Salaam Stock Exchange is a stock exchange located in Dar es Salaam, the largest city in Tanzania. It was incorporated in September 1996 and trading started in April 1998; it is a member of the African Stock Exchanges Association. There are currently 9 listed companies.
The Douala Stock Exchange is the official market for securities in Cameroon. It is located in Douala. It was created in December 2001. Until 2006, its sole listing was Société des Eaux Minérales du Cameroun (SEMC). Now it also includes Société Africaine Forestière et Agricole du Cameroun (SAFACAM).[16]
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