Stock Exchange: Meaning And Importance Of Stock Exchange In Agriculture

Table Of Contents

  • Meaning Of Stock
  • Meaning Of Shares
  • Meaning Of Stock Exchange
  • People Involved In Stock Exchange
  • Importance Of Stock Exchange

The word “stock” refers to a collection of shares into a bundle. The capital raised by a company through the issue of shares. Stock are transferred into fractional amount.

Share means financial instrument that shows that one owns part of a company and are sold and bought as unit.

Stock exchange is therefore defined as a market where shares, stock and other securities are bought and sold. The transaction is usually approved by the stock exchange of Nigeria.

People Involved In Stock Exchange

(1) Stock Brokers Or Representative:

These are dealers in stocks and shares, acting as agents on behalf of the public, who have interest in either buying and selling of securities.

(2) Buyers And Sellers:

They buy or sell securities on their own through brokers who act as their agents. Selling price is usually high.

(3) Buyers:

There are members of the public who are willing to purchase securities from any corporation that is lured in the stock exchange market.

(4) Sellers:

They are members of the public, who are willing to sell their securities to interested and willing buyers.

(5) Farmers Agent:

They are also called “jobbers”, They buy from the brokers at a lower price and resell to them later when the price rises, to make profit.

Importance Of Stock Exchange In Agriculture

Stock exchange plays multiple role in the economy of a nation. It contributes to the development of agriculture, especially for large producers. There are other benefits, especially in agriculture. These includes:

(1) The buying of shares provide money for the farmer to start off new areas and expand the farm business.

(2) It Encourages Contract Farming: People could now buy shares in setting up a farm business and share dividend or profit.

(3) Stock exchange can serve as a medium for dissemination of information to agriculture.

(4) Shareholders Are Rewarded: Shareholders are rewarded well for their investment through bonus shares, or payment of dividends to them.

(5) Investment Opportunities: These are created for small investors. Investment in shares is open to both the large and small stock investors Individuals can buy number of shares they can afford.

(6) The Value of shares, stock and other securities is determined by stock exchange.

Summary On Stock Exchange

Stock refers to a collection of shares into a bundle. While shares means a financial instrument that shows that one owns part of a company and it is sold and bought as unit.

Stock Exchange is a market where shares, stock and other securities are bought and sold.

People involved in stock exchange are Buyers, Sellers, Farmers Agents, Stock Brokers etc.

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