Stock markets have become very popular in the Arab world and the Gulf countries, because they contribute significantly to the capital flows and convert them to various investment channels. This in turn leads to increased growth rates in the stability and prosperity of national economy.
Companies: The stock market provides companies with the capital that helps them finance and expand their business. When the company issues one million shares for sale and the value of the stock is $10, the company gets a capital of $10 million, which can be used in the development of its business and expansion projects. The company by that offers its shares for sale “IPO” to avoid debt or borrowing for development purposes.
Investors: Stock market participants have the opportunity to make profits together with the listed companies. The investor can obtain profits from each stock he own in the company, or to buy the stock of the company at a specific price and when the value of the stock rises, he will sell and earn profits.
The investor must be fully aware that the buying and selling processes in the stock market are managed through two fundamental and different theories.
- Verification and knowledge of the financial data and statements of companies that he wishes to trade in their stocks.
- Buy directly at a certain price and sell at a high price depending on the market’s daily movements.
The following points need to be taken into account before starting to trade stocks:
- Patience and trade in a large amount of money.
- Always rely on your expertise and do not make decisions on the recommendation of unqualified people.
- Gather sufficient information about the companies in the stock markets in order to make sure you buy the right stock.
- Ignore market rumors and do not buy and sell stocks based only on stock market movements.
- You must deal with a reliable financial intermediary with qualified experts that will help you to manage your money in the best way, and provide you with the necessary expertise to enter the world of stocks.
Global Stock Indices
S & P Global 100: measures the performance of 100 multinational companies and helps investors track the performance of international companies. It is designed to support low cost investment products, including exchange traded funds and listed derivatives such as futures contracts and options.
S & P Global 1200: This index covers 30 countries and more than 70% of the global market capitalization. It spreads in many countries around the world such as the United States, Canada, Brazil, Mexico, Japan, Australia and many European countries such as the United Kingdom, Norway, Sweden, Denmark and Switzerland. The main sectors of this index are the financial sector as well as the telecommunications and energy sectors.
The Global Dow: This index is made up of 150 companies from all over the world, and stocks are selected by leading Wall Street economists. This broad index includes the Dow Jones industrial with 30 stocks as well as the Dow Jones Transportation and Alternative Energy Indices.
MSCI World: It contains more than 1,600 stocks of companies from around the world. The index includes securities for about 23 countries and includes a set of stocks for all developed markets in the world. It excludes stocks from emerging economies and therefore the name of the index does not fully reflect the nature and content of its work.
MSCI EAFE: Designed to measure the performance of the stock market in developed markets outside the US and Canada, as EAFE symbolizes Europe, Australia and the Far East. It is the oldest international stock index in the world and may be the most commonly used indicator of foreign stocks funds in the United States.
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