- What are the factors affecting the mechanisms of the Stock Exchange?

Stock Exchange is only a market for the sale and purchase of securities such as stocks and bonds. And like any commercial market There are many factors that may affect the exchange mechanisms. And if the stock market divided into three parts, and is the buyer and the seller and the market itself is able to easily identify the factors affecting each of these parts. But in this article would be a focus on the factors influencing the market itself. From this we can say that the following factors are most influential
- Supply and demand
- Transparency
- Rumors
- Economic situation
- Political climate

Let's look at all of these factors alone: -

Supply and demand

Is the theory of supply and demand of the oldest economic theories and the most important factors affecting the movement of stock market and determine stock prices and the traded securities. The show is the term used to refer to the possibility of providing goods in the market to your customers who want and can acquire them. And the providers of this product is the manufacturer and in this case is the stock market. And if moved to the definition of the term demand, you will find that the application refers to the desire and ability to purchase goods. And the relationship between supply and demand is the relationship of direct proportion, meaning that any increase in demand leads directly to an increase in display size. But if you can not the provider of a commodity to bridge this increase in demand result is the increase in prices.

Transparency

Transparency in the race Exchange refers to the speed and efficiency of the transfer of information to all investors at the same time within the stock market. And the transparency factor reflects the integrity of the proceedings on the Stock Exchange and is the group responsible for establishing the rules of justice and equality. So relay information quickly and efficiently believes that there is no advantage to any investor, so that they can be exploited to gain personal and not others, and for this reason law prohibits, for example to any minister of economy or financial trading in the stock market due to give his position many advantages with regard to economic information and financial State.

Rumors

Rumors are a player hidden in Exchange. Theoretically, there could not be considered a factor in the rumors exchange mechanisms of the difficulty of measuring their impact direct or indirect. But regardless of this fact the former, there is no investor in a stock exchange in the world did not give importance to the rumors. Vahaiat serves as an informal news agency to provide the information investors may find the source of threat or an opportunity for quick profit.

Economic situation

The relationship between the economic situation and level of performance in the stock market is a direct relationship of proportionality, as is the case with supply and demand. So we find it natural to flourish Stock Exchange in the case of the stability and prosperity of the economy of the State. And the main reason for this relationship is that the economy stable and prosperous provides a safety factor for investors within the country and reduces the risk of investment. This leads to an increase in the volume of investment and trade in the stock market. But in the case of a weak economy, the opposite is true as in the Egyptian stock exchange during the second half of 2000 as a result of acute shortage of liquidity and credit crisis Congress.

Political climate

The relationship between the political climate and the performance of the stock exchange relationship is not clear or fixed or proportional, like its predecessors. Political stability is not always an indication or reason for the boom in the stock market, and instability is not necessarily a cause of collapse.
The reason behind this relationship is non-obvious, that the political events affecting usually have two destinations, meaning that might adversely affect the party may be a benefit to another party. Adkha example for this is the period after the 1973 war when the Arabs have taken a hostile position toward Egypt, but in contrast to Egypt met with support and auxiliary of the United States to take the path of peace with Israel. So while the political situation of Egyptian and Arabic were troubled, the Egyptian greater benefit as a result of good relations with the United States. But regardless of these anomalies, we find that the turmoil of the political climate as a result of war, for example, always lead to the collapse of the economy and therefore in the performance of the bourse, as is the case in the Palestinian stock market, for example.