Please wait while the transcript is being prepared...
0:00
My name is Rudy Aernoudt.
I'm a professor at the
University of Ghent in Belgium.
Today, the talk is about
issue of shares
of stock markets.
0:14
When we speak about
stock markets,
we are speaking about
the quotation of shares,
which is well known.
Secondly, of bonds, which
might be government bonds,
industry bonds, that's what we
call them, the secondary market,
but other things like
options, futures, turbo,
trackers, are all
financial products
that can be quoted on
the stock exchange.
If you speak about
stock exchange,
the stock exchange can be used
as a financing instrument.
If once you're quoted on
the stocks and need money,
you can raise capital by having
more shares or it can be used,
of course, as an
investment vehicle
for those who are buying shares.
0:55
In fact, we should not speak
about stock exchange but
stock exchanges
because everywhere
in the world we have
different stocks.
For instances in Europe, we
have Euronext and Euronext is
a merger of the former
National Stock
Exchanges of Amsterdam,
Brussels, Paris, Dublin,
Lisbon, Oslo, Milan.
We have the Deutsche Borse,
which is in fact Frankfurt
and Switzerland.
We have of course, the
London Stock Exchange,
which in particular is the
alternative market for
young start ups and technology
companies and in
the United States,
of course, we have the
New York Stock Exchange
and we have the NASDAQ.
All of them are different
stock exchanges with
different rules.
1:36
What is important
if you speak about
stock exchanges is two elements.
The first element is
what we call liquidity.
How much rotation is there
for a certain stock?
For instance, for
a certain share,
how many people are buying,
how many people are selling?
Now, the big problem,
if you quote a share
on the stock and there's
not enough liquidity,
there's not enough people
buying or selling,
then one buyer or one seller can
really influence dramatically
the price of the share.
One of the conditions
today quoted is
to have sufficient liquidity.
The second big concept
we should know
is what we call capitalization.
Capitalization is the value of
the company based on the
price of the shares.
You take the price of the share,
you multiply by the
number of the shared,
and that's the
capitalization value
of a company that is
quoted on the stock.
This capitalization, we
speak about large caps,
mid caps and small caps,
depending on how big
this capitalization is.
