Money bills
The term “securities” is applied to all papers and sukuk issued by public governmental and civil bodies, and private companies, such as insurance companies and private hospitals. They give the person who owns them a right with the entities that issue them, and they are distinguished by the fact that they are issued at the same value, unlike commercial papers whose value often changes.
Buyers and sellers usually meet in a physical or virtual space. In order to trade their securities, it is called the stock market, in which prices are set for their exchange, according to what is called the law of supply and demand, and this market consists of the primary market, which is the issuance market in which all securities are offered for the first time, and the second market, which is that In which securities issued in the primary market are traded.
The importance of securities
- The financial and market value, and this value can be increased or decreased, depending on the status of the issuing company. It may be high at the beginning of the day, and collapse in the evening hours. For this reason, the financial bulletin is broadcast after the closure of the global financial market (the stock exchange).
- It is negotiable in commercial ways, as there is a possibility to assign it, and that is through the signature of the owner on the back of the bond, or handing it over in the event that it is a bearer bond, and these methods are considered easier than the methods of civil circulation.
- The ability of these papers to fulfill and pay the accumulated debts of their owner.
Securities types
- Shares, which is evidence that the holder has a part in the company issuing that share.
- Bonds, and bonds are usually issued to be evidence of the indebtedness of the issuing company, which increases the return and income that the bond holder takes, and they are divided into two types:
- Cash bonds, which are issued in exchange for a cash amount provided by the owner of the bond.
- In-kind bonds, which correspond to in-kind property presented to the issuing company, such as lands and buildings, and are divided according to the method of issuance into:
- Nominal advertisements, which are issued in the name of its owner.
- Bonds for their holders, which are issued without writing any names, so their ownership automatically returns to those who hold them.
- Bonds by order, this type of bond can be leased, and the importance of endorsement is to follow the series of signatures and owners of this bond.
Conditions of attractiveness and efficiency in the stock market
- The greater the market and its depth, the greater the number of companies listed in the market, the greater its depth, and the greater the market value of the traded shares, the larger the market.
- Liquidity, which means making it possible to convert securities into cash at the time the investor needs it, and the larger the market, the greater the liquidity.
- Transparency, that is, providing all information about the companies listed in the market, and ensuring that it is constantly updated.
