Thus stock exchanges safeguards the interest of the investing public and also regulates company management. The stock exchange transactions are made publicly under well defined rules and regulations and bye-laws. 0000005360 00000 n Stock exchanges also creates the habit of saving, investing and risk bearing amongst the investing public. Any artificial scarcity is prevented due to the rules and regulations of the market. In a free economy, the stock exchange is the pivot of the money market. If they are not so, then through the stock exchange the government may indicate and accordingly suitable steps can be taken. 0000001256 00000 n 0000010370 00000 n The Lusaka Securities Exchange (LuSE) was established in 1933 with support from the International Finance Corporation (IFC) and the World Bank. 5. 0 8 0 obj <> endobj 0000001895 00000 n 0000000016 00000 n LuSE aims to draw foreign portfolio investment in Zambia by promoting its potential high investment returns and emerging capital market. Due to its dynamism and higher return on capital, the stock exchange is capable of attracting more foreign funds. But the problem […] The secondary market is in the form of stock exchange. By analyzing the ups and downs of the market quotations, the causes for the changes in the business climate can be ascertained. In addition, a variety of market reports are available in PDF. Stock Market Capitalization, Pension Fund Investments, Cointergration 1. Stock exchanges also creates the habit of saving, investing and risk bearing amongst the investing public. Providing Scope for Speculation: To ensure liquidity and demand of supply of securities the stock exchange permits healthy speculation of … M0 �� Stock exchange encourages people to invest in ownership securities by regulating new issues, better trading practices and by educating public about investment. Institutions like banks can invest their idle funds in the stock exchange and earn profit even within a short period. It the stock exchange, the prices of securities clearly indicate the performance of the companies. Stock exchange helps Capital formation, OTCEI | Definition | Need | Features | Listing requirements, Difference between regular stock exchange and OTCEI, 16 Important factors that influence share prices, Differences between Forward contract and Futures contract, Listing of Securities | Objectives | Requirements | Procedure, Indian Stock Exchange | Structure | Admission of members, Weaknesses of Trade Union Movement in India and Suggestion to Strengthen, Audit Planning & Developing an Active Audit Plan – Considerations, Advantages, Good and evil effects of Inflation on Economy, Vouching of Cash Receipts | General Guidelines to Auditors, Audit of Clubs, Hotels & Cinemas in India | Guidelines to Auditors, Depreciation – Meaning, Characteristics, Causes, Objectives, Factors Affecting Depreciation Calculation, Inequality of Income – Causes, Evils or Consequences. Whereas an unstable government with heavy borrowings from other countries will have a downward trend in the stock market. s�( �6e`R !! The most important function of a stock exchange is that it acts as an economic indicator of conditions prevailing in the country. 0000000716 00000 n The savings of the public are mobilized through mutual funds, investments trusts and by various other securities. How to cite this paper: Musawa, N. and Mwaanga, C. (2017) The Impact of Pension Funds’ Investments on the Capital Mar-ket—The Case of Lusaka Securities Ex-change. startxref Liquidity in Stock Exchange. The Stock Exchange is a system of arrangement which, in combination with other institutions, patterns the capital market of an economy. It integrates the demand and supply of securities in an effective manner. The monetary policy and the fiscal policy of the government have to be favorable to businessmen and producers. This factor ensures a great measure of safety and fair dealings to the average investors. They want to buy shares in great companies like Zambeef, Real Estate Investments Zambia (REIZ), Madison Insurance, Copperbelt Energy Corporation Plc (CEC), and Zambia Sugar and ZCCM Holdings Plc.