The importance of a stock exchange from the viewpoint of society:
1. Rapid capital formation:
(a) Many people save their money and are ready to invest where they can get high rate of returns, when they check with the good companies with high premium amount they tempted to invest in securities.
(b) This habit leads to investment of savings in corporate and government securities.
(c) The high returns of dividend from these securities may further be invested in buying more securities.
(d) This flow of funds leads to rapid and continuous capital formation.
2. Economic development:
(a) It is the market in which existing securities are purchased and sold.
(b) This process is called as disinvestment and reinvestment.
(c) Through easy funds mobilisation, this leads to more capital, enhancing economic development of the country.
3. National projects: As stock exchange promotes, the capital formation by rating and approving the projects which brings national prosperity can be easily undertaken.
Value Points:
1. National prosperity.
2. This habit leads to investment of savings in corporate and government securities.
3. Easy funds mobilizing.
4. Enhancing economic development.
5. Promoting the people to come with the projects.
6. Helping and providing the people a platform to buy and sell the securities.
7. Readiness to cooperate.