The stock market has a long history. According to French historian Fernand Braudel, in 11th century Cairo, Islamic and Jewish traders had already established every form of trade association.They were knowledgeable about credit and payment methods. Braudel’s suggestions negate the opinion that the Italians contrived these methods later.
In 12th Century France, the courratiers de change dealt with managing and regulating the debts of agricultural communities on behalf of the banks. They can be referred to as the first brokers, because they only dealt with debts. The people of Flanders and the neighboring counties also implemented this idea, and Beurzen was soon introduced in Ghent and Amsterdam.
In late 13th Century, commodity traders in Bruges gathered inside the house of a man named Van Der Beurse. In 1309, they were named the “Brugse Beurse,” and institutionalized their unofficial meetings.
The Bankers of Venice started trading in government securities in the middle of the 13th century. In 1351, the Government of Venice prohibited the spread of rumors done with the intention of decreasing government fund prices. During the 14th century, the Bankers of Pisa, Verona, Genoa, and Florence also started trading in government securities.
This was possible because these independent city-states were governed by a group of influential citizens, and not by a duke.
Later, joint stock companies were started in the Netherlands. This provided shareholders the opportunities to invest in business ventures and get a contribution of their profits or losses. In 1602, the Dutch East India Company issued their first shares through the Amsterdam Stock Exchange, and it was the first company to issue stocks and bonds. A stock exchange in London started trading stocks in 1688. The Amsterdam Stock Exchange (or Amsterdam Beurs) was the first stock exchange to introduce continuous trading in the earlier part of the 17th Century. According to Murray Sayle, the Dutch were the originators of short selling, option trading, debt-equity swaps, merchant banking, unit trusts, and other speculative instruments. Stock markets are currently present in every developed and most developing countries, but the biggest stock markets are present in the United States, Canada, China (Hong Kong), India, UK, Germany, France, and Japan.
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Last Updated on : 26th August 2013