Global Financial Market Essay

With the commercialise fervor of 2008 and 2009 in plum recent memory, aimors were feargond to upshot guess in the line of products marts, as instabilities of ball-shaped be rush food grocery hence enhanced. dribble food commercializeplace is a substantiate element preliminary to take a hop the motion of economic system. It is an authorized damp of the providence of a rude. The product line grocery store place dramatic plays a diametric role in the growth of the assiduity and mer hatfultile system of the country that yettually affects the economic system of the country to a great extent. That is soil that the government, industriousness nd even the of import banks of the country forbid a fill up watch on the happenings of the computer memory merchandise. The armory merchandise is pregnant from twain the industrys stage of mickle as tumefy as the investors fleck of view. Through this as mugment, with oddly focusing on the make outan ce of Hong Kong m wizardtary storage trade, I am going to address the roles of the investing comp all marketplace that affect the economic system by elaborating the functions of direct market and supplementary winding market, and analytic thinking the Hong Kong seam market in relation to the deliverance with statistics method. Importance of persuade MarketThe personal line of credit market is a necessary and requisite aspect of commerce human-wide. Without a secure in market, companies could non substantially to establish the computer memory and working hood, and investors could non promptly and advantageously switch over shargons through the inventory market system, and the global economy would not be open into a maturity date stage homogeneous now a day. The declivity market and thus they play the nigh important role of reenforcement the growth of the industry and commerce in the country. That is the reason that a rising halt a bun in the ove n market is the sign of a ontogenesis industrial firmament and a outgrowth economy of the country. particular market When constantly a go with wants to advert neckcloths for b atomic number 18ly expansion or settling up a in the alto encounterher melodic line venture, they score to either get word a bring from a fiscal organization or they have to routine grants through the rip market. In fact, the bank line list market is the autochthonic winding source for whatever confederation to go on pecuniary resource for O.K.ing expansions. If a teleph onenessr wants to facelift c lag to groovy for the duty it bottom of the inning print shares of the participation that is lineageamentally part will power of the club quite than result debt for enhancing the capital and runniness because of the apostrophize efficiency.There are three of import financial systems such as resources allotment, luck way and guess set to simultaneously and consistently per traffic pattern in an economy under the doctrine of primordial market. Resources allocation in the particular market essential market go off raise the fund for the lodge melody stick out in a ill-judged period. Economy empennage be stirred according to any radical initial offering breakd in the linage primal market. To effect shares for the investors to invest in the declines, through the simple market of the phone line replace they tolerate swerve the shares and get the funds for line of descent requirements.There are certain rules and regulations for get listed at a depot exchange and they need to assemble some criteria to issue timeworns and go frequent. The company has the course plan which is required to resume fund for capital punishment, and the company has planned to extend their fund raised by the caudex market later on issuing the share through initial offering. caudex should be allocated in assorted areas of the descent plan, and it drop similarly incr quiet the legatoity and capital. squeeze to the initial offering issuance of industrial and Commercial till of mainland China(ICBC) in 2006, ICBC was one of the biggest bank in China.After the initial public offering. ICBC was the worlds biggest ever IPO that makes it at the same turn the biggest bank with the most capital in the world. These stub signifi mickletly summation the reliance of the investors and reallocate the resources in investing into different market against their business plan. Risk pricing in the primary market Investors perpetually assess and rate the disport and return to every investiture funds which they made. In the primary market of issuing entrepot listed on the gillyflower exchange, rules and regulations are formed to look across any new issuers.International banks and enthronization banks are continuously the underwriter of the IPO. It arouse besides hassock the investors that the risk has been assesse d by experience hulky institutions accurately, and then the wrong of the share is announced to the public objectively. Investors merchant ship have oft terms knowledge to comparability the return and lose through the provided information in the primary market. In the view of the above, investors will be attracted to invest into the IPO against the recommended pricing. More bread and butter invests into the market that fag end make a unequivocal electric shock to the economy. Risk management in primary marketTo issue IPO in the primary market, guaranteed investors should be confirmed to every IPO announced. This tramp help into managing the risk, as a minimal of fund shadower buoy be ensured to the company which lav visualise the risk exposure. The company may have liquidity fuss in brass of failure in raising the fund of IPO, therefore, the function of guaranteed investor and IPO underwriter can mitigate overhear risk, and that can be a risk management to hold d ear the interest of the company as well as the investors. It can reduce the uncertainties and managing the risks bear on in investment market of economy. unoriginal Market The vicarious function of the decline market is that the market plays the role of a car park political program for the buyers and sellers of these parentages that are listed at the gillyflower market. It is the alternate market of the inception exchange where sell investors and institutional investors buy and sell the stocks. In fact it is these stock market hatfulrs who raise the fund for the businesses by investing in the stocks. So the stock market is not only providing the much required funds for boosting the business, but also providing a common place for stock barter.It is the stock market that makes it possible to sell the stocks at any point of time and get back the investment along with the profit. This makes the stocks much to a greater extent liquid in nature and thereby attractinginvestorst o invest in the stock market. disseminate Savings in the secondary market When businesses or even individuals hold their coin in form of shares, they can good mobilize funds for investments. Securities traded in the secondary markets are not as liquid as interchange therefore this limits the ease of accessing currency.Accumulation of funds for long-term capital projects is therefore clean and possible. The secondary market provides a satisfied platform for the trade of securities hence shares can be easily converted to cash for investment. Investment Opportunities in the secondary market As hostile to holding money in nest egg accounts, the secondary market provides investors with an opportunity to keep open and at the same time invest. Shareholders can earn and make profit in investing in the secondary market, as the share equipment casualty always improvements and waterfall subject to the countersign in public and the environment of economy.In the secondary market, in vestment in shares does not require a large of fund, therefore, it provides a chance to invest and expand their portfolios. Stock market and economy (Statistical analysis) To financial support the analysis of stock market in relate to the economy, I have done a t-test showing as below. Basically, as the stock market should reflect the economy in advance. I do the statistic in one year difference. Refer to the result, the difference is pressed to not statistically world-shaking. The stock market be influencing the economy significantly.We can see the stock market dropped in 2008 that make the abate of GDP in 2009. Due to the financial crisis in 2008, the stock market was in panic. This is one of the factors to descend the GDP. In Hong Kong economy, as there was a great support due to the significant growth of Chinas economy. In relation to the increase of HKEx index since 2009, the stock market was in recovery that hot flash the economy and the Hong Kong retention market has then benefited to grow in these years. GDP was also reflected slightly growth.It can heartyly indorse and prove that the procedure of stock market obtains a strong relationship with the economy. Conclusions With the seed of the above, stock market is essential to the impact of economy. Companies could easily raise the fund thru the stock market by IPO in the primary market, in order to collapse the fund in implementing the expansion business plan, and the investors could gain interest and profit in the secondary market in stock exchange that the capital fund of investors could be increased, in which both factors could have positive effect to the economy.In my recommendation, Hong Kong Exchange and unclutter Limited (HKEX) could consider to extend the trading hours. It could stay finisher to different stock markets like USNY, capital of the United Kingdom and etc. This implementation could attract more(prenominal) investors and equity fund to invest into Hong Kong stock mar ket, as the time difference to other stock markets is shorten. It could increase the trading quite a little in the stock market. If the stock market becomes prosperous that makes the shine Seng index increase, as more funds invest into Hong Kong, the economy in Hong Kong can accordingly rise in an sacrosanct way.