The financial market derives from the concept of the market in general. Financial markets provide the possibility of dealing with funds by offering and ordering through various financial instruments (stocks and bonds). The money-needing entities export such instruments and sell them to those in surplus, and get them against these instruments on their financial needs. That is, the financial market attracts and accumulates individual savings and financial surpluses of businesses and others, and expresses them as: (units with surplus funds) and their availability to those requiring them, expressed as (Units with deficits or financial need), such as companies wishing to obtain funds for the development of their projects, so financial markets are a relatively integrated system that works to make financial transactions that lead to the creation of assets and financial liabilities and the transfer of their ownership. The more integrated this system the more the market develops and becomes more influential to the surrounding environment. They can be defined as securities investment institutions by issuing and trading, under which securities such as stocks and bonds are sold and purchased and their operations are subject to returns and risks. Lasher defines financial markets as the place or location where securities are traded where buyers and sellers meet assets such as companies that need money issuing securities, usually shares or bonds, which are sold to investors by them and are individuals who buy securities with their savings. Those who expect to generate returns from funds invested in their purchases and companies use those funds for their own projects. Or it is the mechanism through which units with financial deficits (borrowers) meet with units with financial surpluses (lenders) to achieve their respective objectives, namely, to employ surplus money or borrow money
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| Financial Markets and their role in the Country |
The Role of Financial Markets in the Country
Stock markets provide services that will drive the country's economic growth by playing a prominent and important role in transferring financial resources from surplus units to deficit units. They are excellent markets and an important factor in attracting foreign and domestic capital from this point of view. The importance of the stock market is as follows:
1- Mobilizing savings for investment:
When individuals withdraw their savings from banks - current deposits - to invest in equities, this leads to a more rational allocation of resources because funds that could have been disbursed or held in unused deposits are mobilized and directed by investing those funds in economic projects that contribute to the development of the national economy
2- Creating investment opportunities for small investors:
financial markets, unlike other businesses that require large capital expenditures. Equity investment is open to all large and small investors because a person buys the number of shares he can afford. So the stock exchange provides an additional source of income for small savers.
3- Financial markets contribute to the promotion of innovation:
financial markets contribute to the promotion of innovation, competition, changes, openness, and research and development as they contribute to economic development by promoting capital accumulation. The development of these markets promotes the country's economic growth through the formation of productive capital and ensuring that these funds are used at their best Policy improvement depends on innovation, competition, change, openness, research, and development, all of which will lead to long-term economic growth in the country. This theory illustrated two of the main factors of economic growth, human capital, and technology, and the development of these factors depends on the function and structure of financial institutions, including financial markets.
4- Financial markets are the main driver of a nation's economic growth and development:
economic development is a key objective of national policy in an economy, while the formation and accumulation of capital are also seen as active factors in the economic development process. It is one of the key processes through which growth aspects are feasible and feasible. Because the main driver of economic growth and development in any country is the capital it owns. It positively affects the economy by providing financial resources through the operations of capital markets and long-term projects are financed. These projects can be promoted by government or private sector institutions. They are usually in areas such as infrastructure, agriculture, solid minerals, manufacturing, banking and other financial services, and other areas of the real sector. Thus, without the efficiency of the capital market, the national economy can be deprived of the funds required for sustainable growth in the long term.
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