The securities market is the place where stocks, bonds, investment fund shares and other valuable securities are issued and traded. The securities market is the product of the development of market economy to a certain stage, and it is a market to solve the contradiction between capital supply and demand and liquidity. The securities market realizes the connection between financing and investment by issuing and trading securities, which effectively solves the contradiction between supply and demand of funds and the adjustment of capital structure.
(B) the characteristics of the securities market
The securities market has the following three remarkable characteristics:
1. The securities market is a place for direct exchange of values. Securities is the direct representative of value, and it is the direct embodiment of value in essence. Although the objects of securities trading are all kinds of securities, because they are the direct expression of value, the securities market is essentially a direct exchange place of value.
2. The securities market is a place where property rights are directly traded. The trading objects of the securities market are stocks, bonds, investment fund shares and other securities as economic rights and interests certificates. They themselves represent a certain amount of property rights, so they represent the ownership or creditor's rights of a certain amount of property and related income rights. In fact, the securities market is a direct trading place for property rights.
3. The stock market is a place where risks are directly exchanged. Securities is not only the representative of a certain income right, but also the representative of a certain risk. Securities trading not only transfers certain income rights, but also transfers the unique risks of securities. Therefore, from the perspective of risk, the securities market is also a place for direct exchange of risks.
The structure of the securities market
The structure of the securities market refers to the composition of the securities market and the proportional relationship between its parts. There are many kinds of securities market structures, but the most important ones are:
1. hierarchy. This is a structural relationship formed according to the order of securities entering the market. According to this order, the composition of the securities market can be divided into issuing market and trading market. The securities issuance market, also known as "primary market" or "primary market", refers to the market formed by issuers selling new securities to investors in order to raise funds in accordance with certain legal provisions and issuance procedures. The stock exchange market, also known as "secondary market" or "secondary market", is a market where issued securities are circulated and transferred through transactions.
The securities issuance market and circulation market are interdependent and mutually restrictive, and they are an inseparable whole. The securities issuance market is the foundation and premise of the circulation market. Only when there is a supply of securities in the issuance market can there be securities trading in the circulation market. The type, quantity and mode of securities issuance determine the scale and operation of the circulation market. The circulation market is a necessary condition for the continuous expansion and issuance of securities, providing market conditions for the transfer of securities and making the issuance market full of vitality. In addition, the transaction price in the circulation market restricts and affects the issue price of securities, which is an important factor to be considered when issuing securities.
2. Variety structure. This is the structural relationship formed according to the types of securities. This structural relationship mainly includes stock market, bond market, fund market and derivative market.
The stock market is a place where stocks are issued, traded and traded. The issuer of the stock market is a company limited by shares. A joint stock limited company increases its share capital by issuing shares, or increases its share capital by issuing shares during the company's operation. The trading object of the stock market is stocks. The market price of stocks is not only related to the operating conditions and profitability of joint-stock companies, but also influenced by other factors such as politics, society and economy. Therefore, stock prices are often in fluctuation.
The bond market is the place where bonds are issued, traded and traded. The issuers of bonds include the central government, local governments, central government agencies, financial institutions and companies (enterprises). Generally, the funds raised by bond issuers through issuing bonds have a time limit. When the bond matures, the debtor must repay the principal and pay the agreed interest on time. Bonds are creditor's rights certificates, and the relationship between bondholders and bond issuers is creditor's rights and debts. The transaction object of the bond market is bonds. Because bonds have a fixed coupon rate and maturity, the market price is relatively stable relative to the stock price.
Fund market is the market where fund shares are issued and circulated. Closed-end funds are listed on the stock exchange, and open-end funds are circulated and transferred through subscription and redemption by investors from fund management companies. In addition, in recent years, traded open-end index funds (ETP) or listed open-end funds (10F) have been set up in major markets around the world, so that open-end funds can also be listed on the exchange market.
Derivative market is the market where various derivative products are issued and traded. With the deepening of global financial innovation, derivatives market has become an indispensable part of financial market.
3. The structure of the trading place. According to whether trading activities are carried out in a fixed place, the securities market can be divided into tangible market and intangible market. Usually people also call the tangible market "floor market", which refers to the securities trading market with a fixed place. The market is organized and institutionalized. The birth of tangible market is one of the important signs of the centralization of securities market. Generally speaking, securities must meet the listing standards stipulated by the stock exchange before they can be traded on the floor. Sometimes people also call the intangible market "OTC market"; Refers to a market without a fixed trading place. With the development of modern communication technology and the wide application of computer network, as well as the evolution of trading technology and trading organization, more and more securities transactions have been conducted by telex, telegram, telephone and network of brokers or dealers.
At present, the clear division between on-site and off-site no longer exists, and a multi-level securities market structure has emerged. Many traditional over-the-counter markets have the characteristics of centralized trading due to the emergence of quotation providers and electronic matching systems, and the exchange market has gradually introduced the trading organization form suitable for over-the-counter trading.
(D) the basic functions of the securities market
1. Financing-investment function. The fund-raising and investment function of the securities market means that the securities market, on the one hand, provides opportunities for demanders to raise funds by issuing securities, on the other hand, provides investors for capital suppliers. Any securities traded in the stock market is not only a tool for raising funds, but also a tool for investment. In the process of economic operation, there are both excess funds and shortage of funds. In order to increase the value of their own funds, people with surplus funds must find investment targets; In order to develop their own business, people who are short of funds must look for funds from the society. In order to raise funds, people who are short of funds can raise funds by issuing various securities, and those who have excess funds can invest by buying securities. Financing and investment are two inseparable aspects of the basic functions of the securities market, and ignoring either of them will lead to serious defects in the market.
2. Pricing function. The second basic function of the securities market is to determine the capital price. Securities are the manifestation of capital, so the price of securities is actually the price of capital represented by securities. The price of securities is the result of the interaction between the supply and demand sides of securities in the securities market. The operation of the securities market has formed a competitive relationship between securities demanders and securities suppliers. As a result of this competition, the demand for capital that can produce high return on investment is large, and the corresponding securities prices are high; On the contrary, the price of securities is very low. Therefore, the securities market provides a reasonable pricing mechanism for capital flow.
3. Capital allocation function. The capital allocation function of the securities market refers to the function of guiding capital flow through securities prices, so as to realize the rational allocation of capital. In the securities market, the price of securities is determined by the expected rate of return that securities can provide. The price of a security is actually a reflection of its financing ability. Securities that can provide high returns generally come from well-run enterprises with great development potential or enterprises in emerging industries. Due to the high expected rate of return of these securities, their market prices are correspondingly high, so their financing ability is strong. In this way, the securities market will guide the capital to flow to enterprises or industries that can generate high returns, make the capital as efficient as possible, and then realize the rational allocation of capital.