Stock eXmaschange is All Around Us

Let me take an opportunity and tell with highest solemnity Merry Christmas to all of you who doesn't read my posts, who doesn't feel any remorse in connection with its efforts in 2007 to achieve the goals. Pace mr. reader, I would like to wish an effective new year in 2008 to all of You, do not forget: the only notable and considerable thing is the impossible, we just have to do which is it.

China must be happy

There are some signs that show the EMU (European Monetary
Union) is not immune against the mortgage crisis, which was
spilling over from U.S.A. According to this recognition, the ECB
(European Central Bank)would help the pecuniary system with extra sources.

ECB said in a statement friday night, that it would pump extra
sources in order to achievebigger liquidity in financial system.
But, on the question: "How much excess sourceswill be pumped
in the system by ECB?" the ECBdid not mention. Thought, it signed the durationof this process is long period, it assumed the pumping method will keep until
the end of this year.

The new intervention is promised after the time when the hunger
of liquidity increased such an extent that the three-mounth U.S.A
interest rate had been raising to 5,04 percentage, it is hardly
impermissable when the prime rate is 4,5 percentage.

Torrid in Chine

China's economy has been soaring for years with its
double digit growth rate (approximately: 11,5%).
This increase is fuelled by infrastructure investments,
stock market, and the high level of capital inflow. Throw the
raising key rate requirement its bankin system has been
heightening bolster.

Do not forget, Chine has the biggest population

on Earth with its ~ 1,5 billion inhabitants.

According to the economists the theory, which is said: "Chine will be able to be exportoriented in the long run" is absurd, nonsens. It is particularly reflected in the building industry, where we can find a huge steel-starving effect, consequently Chine shows signs that by and by it has been morphing to importoriented.

The fetching growth rate can impuls a healthy and seren envy

among european countries, which are wrestling with problems of

its continental european welfare modell.

These circumstances have caused a higher level of throb of

european's economy hearth.

Where have Chine left its economy problems? - its owned by past.

Subprime mortgage crisis - End, and when?

According to the Federal Reserv chairman, Ben Bernanke, any early
deeming theory would be vain in connection with how acts the crisis
on investors' and customer's sentiment.

Bernanke added that the interest cut might continue, in turn, the
pecuniary fog hasn't been dissolved, and the stabilization of the market
is still waiting for itself. But he hinted that it may not get that much
worse and that investors and lenders may have learned from their
mistakes.

Bernanke also brushed off concerns about a weak dollar prompting
inflation. When David Malpass, chief economist at Bear Stearns,
asked Bernanke if he thought the value of the dollar impacts inflation,
Bernanke said he did not think a fixed exchange rate would be good
for the economy.

At last, here is an interest additional matter, mortgage originations will
fall next year to the lowest levels since 2000, forcing job losses for at
least 30,000 more home finance professionals, according to a forecast
released on Wednesday by the Mortgage Bankers.

Let me draw the conclusion: crisis doesn't end yet.

Another Bite to dust

However, the World's eye has been sticking to bourses,"we need some action out there" (felicity words by James Hetfield, Metallica), and have to take another view in out life, take for instance the scientific life. So far as i am concerned it would be better way than the contemplate of the juncture, with bothering, distressing and so on.
Do not forget Keynes' words: "everything will be ok in the longrun, first or last, but the problem is, we will die in the long run" - not too optimism, but if we take first section of his advice, we ought to turn to the academic life, and its newest achievments.

Human made by dust, ending by dust.

It would be the best title of this "column". Im just about to make up my mind about the achievement of the Max Planck Institute for Extraterrestrial Physics. Their newest research was published, in connection with dust, ionized plasma, DNA,and - beware, the following strings are gripping - life!

Noble, huh?
According to their statement, they had been mading a new simulation, and then, they were surprised. It showed, that the dust filled with electricity is able to sort and morph its structurein the - classical - DNA formation (double spiral). In so far in this form it is able to hold some information, and as we know, this is a characteristic of life. The key is in the variation of long and short period of spirals. The fact that: if we place motes into an ionized plasma, the mote will absorb plasma's electrons, absorb pozitive ions and evolve a shell around itself.

This evolved system can easily make a plasmacrystal, or DNA'sspiral structure, which is keeping information. This structures able to assign their genetic code to each other.
Countless people are doing exert theirselves to find out some evidence, which are proof that the life is an self-directing system.In a way, and explanation, a hurricane can be treated as like an living-organism.

I always know: there is more than meets the eye, and i am beset by many of pace of rascal dust, which eats, makes a crap, thinks,and searches and prepares to the endless battle, i am hopeful, but i will brace myself up, for the present i have to watch the trends of world market, and when the investors will have been peaceful, i consider this dust-mote and stuff.
[ For Those Who Never Calms: http://www.mpe.mpg.de/pke/index_e.html ]

This is not 1929

this is not 1929, yet.

During yesterday, all of notable banks made interveniation ibn order to pump money into the banksystem to maintain the proper liquidation (ECB, FED, JCB and so on..)

These news are bringing two different information: on the one hand, it suggests to the investors that the jitters in USA suprime mortgage market might spillover another countries, sectors,
and this situation claims fire service, which is can be treated as central bank's interveniation.
On the second hand, there is an positive view of this, in the case of ECB, in spite of targeting and following the inflation it could bolster the liquidation to ward off the spillovering juncture risks.

American FED had made interveniation similarly. There is a gripping moment, Ben Bernanke
said: the reason why 1929 happened was chiefly the contribution of the central bank to the
credit-bubble, the then cutting of the prime rate was a big mistake, cause it conducived to the easing liquidation.

The interveniation means that central banks were pumping lots of money into the system,
at this time approximately 94,8 billion euro were pumped by ECB. The carry traders were
just about to close their positions, it was caused by the distrustful situation. This is a self-impulsive process, because these closures could trigger some another closing sentiment.

In my firm belief this developing crisis will not be able to deteriorate the global financial climate. I represent it because i think perils of the developed market instruments are divided in wide range among the investors( CDO, CDS ), and through the multiple and very intricate relationships the negative effects can spread easily, that is to say risks predominantly are shifted to another sector by the banking sector, therefor i believe the banking sector is not endangered by any serious crisis.

Paypal in the e-air

Take a little view on the Paypal system which is called elegant financial intermediary between customers and buyers.

"lets have a party" said the parrot and leapt into the vent, if you want a party - take it imaginariously - take for instance want to buy a new spiffy pink samsung mobile on the e-bay for your red-hair little urchin girlfriend, you can use paypal system, and the reason why i offer it to you that its security, and safety of its money-transfer system. nice party, you ought not to pick up your phone, go to the shop and buzzin' with your car for a long time 'til you'll get it.

Paypal is available in more than 103 countries, it provides numerous payments method for your convenience.
- direct debit
- discoverer
- MasterCard
- AmEx
- Visa

On the back of, paypal is a prevailent opportunity on the E-bay, it is used by many people.

I'm lovin' it

I have been reading with a tough relish the book from John Perkins, Confessions of an Economic Hit Man. I find it very intresting, Perkins'
stories are amazing, he tried to show relentlessly the imagines of the
United States about the global empire.

He was in the tight vicious circle, he tried to obtain knowledge,
why he had to do this, and with what goals. Perkins has the clearly-
demonstrate ability, to illustrate the actions of the biggest multinational
enterprises about how will deploy their capability to reach objectives,
and broaden their sparking star in the global dimension.

Money money money, expansion by bid rigging, hazardous offering,
catchy promising, with fictitous explanations, overestimate figures,
and some complex oconometry... Panama, Saud Arabia, Ecuador and so on.
Good book, "i'm lovin' it"

The London Stock Exchange is one of the world’s oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the Exchange quickly grew to become the City’s most important financial institution. Over the centuries following, the Exchange has consistently led the way in developing a strong, well-regulated stock market and today lies at the heart of the global financial community. We are proud of our long history that has helped to build our reputation today. Here are some of the milestones in the story of the London Stock Exchange.

1698
John Castaing begins to issue “at this Office in Jonathan’s Coffee-house” a list of stock and commodity prices called “The Course of the Exchange and other things”. It is the earliest evidence of organised trading in marketable securities in London.

1698
Stock dealers are expelled from the Royal Exchange for rowdiness and start to operate in the streets and coffee houses nearby, in particular in Jonathan’s Coffee House in Change Alley.

1720
The wave of speculative fever known as the “South Sea Bubble” bursts.

1748
Fire sweeps through Change Alley, destroying most of the coffee houses. They are subsequently rebuilt.

1761
A group of 150 stock brokers and jobbers form a club at Jonathan's to buy and sell shares.

1773
The brokers erect their own building in Sweeting’s Alley, with a dealing room on the ground floor and a coffee room above. Briefly known as “New Jonathan’s”, members soon change the name to “The Stock Exchange”.

1801
On 3 March, the business reopens under a formal membership subscription basis. On this date, the first regulated exchange comes into existence in London, and the modern Stock Exchange is born.

1802
The Exchange moves into a new building in Capel Court.

1812
The first codified rule book is created.

1836
The first regional exchanges open in Manchester and Liverpool.

1845
More speculative fever – this time “Railway mania” – sweeps the country.

1854
The Stock Exchange is rebuilt.

1876
A new Deed of Settlement for the Stock Exchange comes into force.

1914
The Great War means the Exchange market is closed from the end of July until the new year. The Stock Exchange Battalion of Royal Fusiliers is formed – 1,600 volunteered, 400 never returned.

1923
The Exchange receives its own Coat of Arms, with the motto “Dictum Meum Pactum” (My Word is My Bond).

1939
The start of World War Two. The Exchange is closed for 6 days and reopens on 7 September. The floor of the House closes for only one more day, in 1945 due to damage from a V2 rocket – trading then continues in the basement.

1972
Her Majesty the Queen opens the Exchange's new 26-storey office block with its 23,000sq ft trading floor.

1973
First female members admitted to the market. The 11 British and Irish regional exchanges amalgamate with the London exchange.

1986
Deregulation of the market, known as “Big Bang”:
Ownership of member firms by an outside corporation is allowed.
All firms become broker/dealers able to operate in a dual capacity.
Minimum scales of commission are abolished.
Individual members cease to have voting rights.
Trading moves from being conducted face-to-face on a market floor to being performed via computer and telephone from separate dealing rooms.
The Exchange becomes a private limited company under the Companies Act 1985.

1991
The governing Council of the Exchange is replaced with a Board of Directors drawn from the Exchange's executive, customer and user base. The trading name becomes “The London Stock Exchange”.

1995
We launch AIM – our international market for growing companies.

1997
SETS (Stock Exchange Electronic Trading Service) is launched to bring greater speed and efficiency to the market. The CREST settlement service is launched.

2000
We transfer our role as UK Listing Authority with HM Treasury to the Financial Services Authority (FSA). Shareholders vote to become a public limited company: London Stock Exchange plc.

2001
We list on our own Main Market in July. We begin our 200th anniversary celebrations.

2003
We create EDX London, a new international equity derivatives business, in partnership with OM Group. We acquire Proquote Limited, a new generation supplier of real-time market data and trading systems.

2004
We move to brand new headquarters in Paternoster Square, close to St Paul's Cathedral.

Road to the crisis ?

It seems a heightening juncture might evolve in the near future. If we take a view on asian region, we can find a big downturn, it can be treated as an embarrasment, i ascribe it to the numerous factors which arised after american economy data revealed and the ex-chairman Alan Greenspan made a statement with heady pessimism about outlooks of the asian stock exchange.

Take for instance the Shanghai Stock Exchange, the shares faced with pull back, and fell with 7 percentage, it was the biggest correction over 3 mounth on chinese SE.

Alan Greenspan and his power

Big downturn could arise in the near future on equity markets, namely the overestimated situation on present markets is unambiguously unsustainable – Alan Greenspan warned investors at a conference in Madrid. Due to this statement after the initially rising the most notable bourse indices of the World fell towards to the red range. Sanghai and the Sentsen Stock Exchange had opened with historic-peak, latter it closed day with minus 2 percentage.

Danger

The former chairman of the FED not by chance warned investors about chinese markets: by this time the CSI 300 index has been strengthening with 95,88 percantage, thus it becomes the best performing indice by far the best. There is a speciel interest part of the story. It seems, Greenspan outweights the chairman of the China’s Central Bank, and the reachest people, Li Ka Sing. Although the huge expactations about the correction, now it seems – albeit with lurching - the propensity to purchase is buoyant in the asian bourses.The shanghai composit Index could have posted the second biggest rising of the World with its 130,4 percantage, in this year it has been increased by 53 percantage by this time, meanwhile in the last year the venezuela’s indice fell back to the second position, and now became file closer. The expansion couples with certainly rising if the perils.

Double Jeopardy

Few days before the Securities and Exchange Commission called on the brokers firm of countries: according to the statement the risk of the chinese capital market’s instruments has doubled, this institution liables for the proper informing for the sake of investors.
After the record value 17 200 billion juan came together on the broker account owned by general public the Central Bank has been starting their warning mission for the problem. According to the experts the seething equity market could do with central intervention int he huge country.

Meanwhile Greenspan’s statement caused a selling streak over Chine’s and region’s bourse, spurts the born of its weakness, in Russian numerous factors contributed to the evolving of the correction measurement.

After Russia had refused the extradition of the ex KGB-agent charged with killing in connection with london-spy, thus the political tension were rising further between EU and Russia. The Russian capital market has worsened, because of the decline of the energy sector profits due to the downturn int he raw materials market. It could be a hard hit for the russian bourses.

NEW YORK MERCANTILE EXCHANGE (1882)

The New York Mercantile Exchange (NYMEX) is the world's largest physical commodity futures exchange, located in New York City. Its two principal divisions are the New York Mercantile Exchange and the New York Commodities Exchange (COMEX) which were once independent companies but are now merged. The New York Mercantile Exchange, Inc. is now traded publicly, as its parent company, NYMEX Holdings, Inc. became listed on the New York Stock Exchange on November 17, 2006, under the ticker symbol NMX.



The New York Mercantile Exchange handles billions of dollars worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems. The prices quoted for transactions on the exchange are the basis for prices that people pay for throughout the world.

Commodity exchanges began in the middle of the 19th century, when businessmen began organizing market forums to make buying and selling of commodities easier. These marketplaces provided a place for buyers and sellers to set the quality, standards, and establish rules of business. By the late 1800s about 1,600 marketplaces had sprung up at ports and railroad stations. In 1872, a group of Manhattan dairy merchants got together and created the Butter and Cheese Exchange of New York. Soon, egg trade became part of the business conducted on the exchange and the name was modified to the Butter, Cheese, and Egg Exchange. In 1882, the name finally changed to the New York Mercantile Exchange when opening trade to dried fruits, canned goods, and poultry. As centralized warehouses were built into principal market centers such as New York and Chicago in the early 20th century, exchanges in smaller cities began to disappear giving more business to the exchanges such as the NYMEX in bigger cities. In 1933, the COMEX was established through the merger of four smaller exchanges; the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. On August 3, 1994, the NYMEX and COMEX finally merged under the NYMEX. Now, the NYMEX operates in a state of the art trading facility and office building with two trading floors in the World Financial Center in downtown Manhattan.

The commodities are in trading:
- Crued Oil
- Aluminium
- Copper
- Coal
- Electricity
- Gasoline
- Gold
- Heating oil
- Platinum
- Silver eg.

Joint together

The Dutch ABN and the British Barclays announced their fusion, thus it will be the greatest bank-fusion of the whole European bank history.

In the course of the merger the biggest one bank will born in the World. The value of the deal is approximately $ 95 billion.

After the merger, the bank-giant will have 47 million client, as well as 27 million issued bank card, and the number of the its employees will 217 000. The Barclays deals in 50 countries, the ABN amro in 53.

The new bankname is: Barclay Plc, and the place of the business will be in Amsterdam.

FRANKFURT STOCK EXCHANGE

The origins of the Frankfurt Stock Exchange go back to the 9th century and a free letter by Emperor Louis the German to hold free trade fairs. By the 16th century Frankfurt developed into a wealthy and busy city with an economy based on trade and financial services.

In 1585 a bourse was established to set up fixed currency exchange rates. During the following centuries Frankfurt developed into one of the world's first stock exchanges - next to London and Paris. Bankers like Mayer Amschel Rothschild and Max Warburg had substantial influence in Frankfurt's financial trade.

In 1874 Frankfurt Stock Exchange moved into its new building at Börsenplatz.
It was only in 1949 after World War II that the Frankfurt Stock Exchange finally established as the leading stock exchange in Germany with consequently incoming national and international investments.

During the 1990s the Frankfurt Stock Exchange was also bourse for the Neuer Markt (German for New Market) as part of the world wide dot-com boom.
In 1993 the Frankfurter Wertpapierbörse (Frankfurt Stock Exchange) became Deutsche Börse AG, operating businesses for the exchange.

From the early 1960s onwards the Frankfurt Stock Exchange took advantage of the close by Bundesbank which effectively decided on financial policies in Europe until the introduction of the Euro in 2002. Since then the exchange profits from the presence of the European Central Bank in Frankfurt am Main.

In 2002 and 2004 Deutsche Börse was in advanced negotiations to take over London Stock Exchange, which were broken off twice.

Today, with a total turnover of 5.2 Trillion € per year the Frankfurt Stock Exchange strengthens its position as the world's 3rd largest trade-place for stocks and the world's 6th largest by market capitalization.

Major listed companies in Frankfurt Stock Exchange
• Adidas
• Allianz
• BMW
• GPC Biotech
• SAP AG
• Daimler Chrysler
• IKB Deutsche Industri Bank
• C and C
• TSS Group
• Hannover Re

Stock exchanges will continue...

Other Banking Services – and methods of payment in foreign trade

Standing order:

Standing order is useful for fixed amount payments that are known to be due on certain dates, e.g: flat rent, car insurance or subscription fees. The client authorise bank in writing to make regular payments until it is withdrawn. Banks charge some money after each transactions.

Direct Debit:

It is an authority you give to the bank to makde regular payments from a current account to the account o fan organization called the originator eg: public utility companies, or suppliers.

Telebank:

It is a free 24-hour automatic and / or live voice service which makes banking easy from any touch tone phone and make a wide range of services available.

Mortgage:

It is a long term loan given by a bank or financial institution for the purpose of purchasing or renovating a house or buying land or other hight value assets. The money is repaid monthly over a period of years. In a mortgage by legal charge, the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it. Flexible mortgage payment system exists, which means the payment are graduated, increasing for a period of time and then level off.

The process of the mortgage:
- mortgage specialist makes a pre-scoring
- if you are eligible for a loan and if you are creditworthy
- specialist calculates the proportion of own resources and the value of the collateral
- appraiser assess the value of the property
- you have to fill in an application form
- if this form is approved, the contract is signed
- you have to provide the following documents: ownership registration of the property, property appraisal, contract of sale stamped by Land Registry Office, uninterrupted employment history, verification of regulat income

Factoring:

Factoring is a flexible form of finance, which advances money to a company as and when it issues new invoices. Factoring can bridge the gap between raising an invoice and getting that invoice paid. Factoring provides the cash flow necessary for working capital and growth.
There are two major advantages of factoring over overdrafts or other forms of personal or business loans, these are:
Factoring is flexible in that the amount you can borrow grows directly with your sales. This is essential to enable companies to fund their growth, since you must usually pay your suppliers before you receive payments from your customers.
No other assets are needed to secure this funding.

Whether you are a new start business or your enjoying healthy growth and increasing sales, or you’re considering expansion, unpaid invoices can really constrain your business. If you are thinking about expanding, the last thing you need is unreliable cash flow. This is where the right factoring provider can help you.
It's a fact of business that many customers delay settling invoices for as long as possible. In many cases you may have to wait 60 days or longer before invoices are settled. This all adds up to bad news when you still need to pay your staff and suppliers on time.
Without the right amount of cash flow when you need it, you may well have to divert precious resources to chasing payment when you should be chasing new business.

Documentary Letter of Credit:

It is a reliable and safe method of payment, and it protects the seller as well as the buyer. It is an undertaking given by a bank at the request of a customer to pay a particular amount in an agreed currency to a beneficiary on condition that the beneficiary presents stipulated documents within a prescribed time limit.

How does a L/C work?
1. The buyer (importer) asks his bank to issue or open a L/C in favour of the seller for the amount of the purchase. There is usually a special application form, which the buyer fills in and sends to his bank. It states all the main points of the parties and the action.
2. The importer’s bank will then select a bank in the exporter’s country to act as its agent, and will notify them that the credit has been opened.
3. The agent bank will notify the exporter that a credit has been opened, and they may add their own confirmation by promising to see that the conditions of payment against the documents will be fulfilled. If they confirm the letter, the L/C is a confirmed credit.
4. The buyer (exporter) ships the goods before the credit expires and sends the shipping documents to the agent bank that checks the documents against the conditions and pays him.
5. The agent bank will then send the documents and debit the importer’s bank with the cost and charges.
6. The importer’s bank then checks the documents, pays the agent bank and sends the documents to the importer so that he can claim the goods.

Types of the Letter of Credit
1. Irrevocable: The buyer cannot cancel the credit.
2. Confirmed: A bank in the seller’s country pays the credit.
3. Sight or straight credit: Immediate payment of the full amount on presentation of the documents. (Cash payment)
4. Acceptance credit: Payment of the full amount at maturity. The contract specifies payment at a future date with a bill of exchange. After presentation of the documents, the bill can be discounted in order to obtain the credit amount (less discount) immediately.
5. Deferred payment credit: Payment of the full amount at maturity. The contract specifies payment at a future date without a bill of exchange; therefore there is no possibility of discounting. It can be accepted as security for an advance.
6. Red clause credit: Under it the seller can obtain an advance from the correspondent bank, but it is the issuing bank that assumes liability. This advance is intended to finance the manufacture or purchase of the goods, which are going to be delivered under the documentary credit.
7. Revolving credit: When the goods are to be delivered in part shipments (instalments) at specified intervals, payment can be made under a revolving credit, which covers the value of each instalment as it is delivered. After the utilization of the first amount the next portion becomes automatically available.
8. Negotiation credit: (or commercial letter of credit) Payment of the credit amount will be made by any bank, not only by the advising bank. (Negotiation means the purchase and sale of bills of exchange.)
9. Transferable credit: The beneficiary may transfer his claim under that credit to a third party. If the credit is divisible and transferable, the amount can be paid to several beneficiaries.
10. Back-to-back credit: It is used when a middleman wishes to transfer to a supplier his claim under a documentary credit, which is not transferable. The middleman’s bank, accepting the first credit issued in the middleman’s favour, opens a second credit in favour of the supplier.

The Stock Exchange

Stock Exchange

The Stock Exchange is a highly organised financial market where bonds, stocks and shares are bought and sold. It is a free market because the prices of securities move in response of supply and demand. When a company invites the public to invest in it, the money is put to permanent use. Therefore the money cannot be returned to the investors because it has been used. The only way that the shareholders can get their money back is by selling their shares to someone else through the Stock Exchange.
If you want to buy or sell shares you can go to the local branch of your bank and tell them what and how many shares you want to buy. The bank will turn to a broker, who goes to the SE on your behalf. The broker works for you on a commission, which is a small percentage of what the shares cost.
A security is a written or printed document acknowledging the investment of money. It covers all kinds of investment with which the SE is concerned. The reward paid is called a dividend, because the profit is divided up among the shareholders.

Equities:

I. Gilt-edged securities (government stocks) are bonds issued by the government of the UK. The name conveys the impression of reliability. The investors are entitled to a fixed rate of interest (yield) at fixed dates (redemption date) on the nominal value.
II. Local authority bonds are issued by local authorities and the money invested represents a loan to the authority.
III. Debentures are issued by companies when the investor lends money to the company, and for his loan he is entitled to receive money in return, the interest. It is also a kind of bond. Debenture holders have no involvement in the management of the company.
IV. Shares or stock certificates are documents stating that the owner has a share in a specific company because he has invested money in it. They entitle the holder to participate in the ownership of a company and to receive its profits if there are any. (dividend) There are two main types of shares:
 Preference shares: Their holders have the right to receive dividends before ordinary shareholders. Normally preference shares pay a fixed rate of dividend but only if sufficient profits are available to make a payment. They carry no voting rights.
 Ordinary shares (equities): They represent a share in the ownership of a company. Each share is entitled to an equal proportion (dividend) of the company’s profit. The amount of dividend to be paid is decided by the directors of the company and is dependent upon the profitability of the firm. Ordinary shares are known as ‘blue chips’.

The Stock Exchange ‘animals’

They are ‘bulls’, ‘bears’ and ‘stags’. They are called speculators rather than investors because they trade in the market for short-term benefits, not long-term gains.



 Bulls believe that the price will rise, so they buy shares and hope to sell them later for a profit.
 Bears think that prices will fall so they sell shares and hope to buy them back at a lower price. (When prices are thought to be rising, the market is described as bullish; when they are falling, it is called bearish.)
 Stags specialize in buying carefully selected amounts of newly issued shares before they are traded on the SE. If they are lucky, they sell these shares as soon as they are traded and make a large, quick profit.

First step - About Banking

Banking, so charming word, what does it mean in practice ?

Banking is the business of dealing in money and instruments of credit. Banks were traditionally differentiated from other financial institutions by theri principal functions of making loans and collecting deposits but their services and activities have diversified over the years. The banking environment has become really competitive and most banks offer a wide range of financial services, not just basic banking. Nowdays, they invest in stock markets, and provide counselling, deal with insurance and pension schemes etc.

Where do their profits stem from ?

In a variety of ways: they charge interest on loans, which has a higher rate than the interest they pay on deposits. The difference between these two rates is called interest spread. Besides, banks make investments, trade with securities, foreign currencies. In the course of this process they charge fees and commissions for transactions and other customer services.

Take a look at retail banking

Retail banking provides services for the general public and small-scale businesses. They collect deposits, handle deposit and current accounts, make mortgages, give term loans, offer overdraft facilities, operate cash dispensers, and night safe facilities, transfer money and exchange foreign currency. They also issue cash substitutes: credit cards, cheque book and traveller’s cheques.

The other form of banks is merchant or wholesale banks specialise in services for the corporate sector like large-scale enterprises and governments. Deals with factoring, leasing finance projects that have a promising recovery rate, assess the risk involved, rpovide venture and developement capital, provide corporate advisory services.

Savings Banks

They offer a safe playe for people to deposit small amount of money and earn interest on it. They do not normally have other banking services. Similarly, mutual savings bank are savings banks owned by depositors.

Savings and Loans Associations ( Thrifts [United States] )

They are financial organisations formed to lend money mainly int he form of mortgages for house or flat purchasing and building. Now they have interest bearing account.

Credit Union / Credit Societies

Similarly to Mutual Savings Banks, are owned and operated by their members and usually organised by a union or people living or working at the same place. They are non-profit, member service, depository institutions who make low interest loans. Some of them offer life insurance and chequebooks.

Investment Banks:

They are sternly profit-oriented commercial banks, who lend money and make investments, sell stocks and shares to members of the public. Also offer advice on mergers, takeovers, and have similar services to those of merchant banks.

Brokerage Houses:

They can buy or sell securities, currency, insurance, property and serve with investment advice.

Unit Trust, and Mutual Funds:

They are companies they collect money from small investors, called unit-holders, and invest in stocks and shares of many different companies. Investors recieve interests and dividends.


The major banking services:

- Credit facilities: consumer / personal loans, secured and unsecured loans
- Overdraft, mortgages
- Financing house purchase and improvement
- Payment services: issue credit cards, chequebooks, traveller’s cheques, set up standing orders, direct debits, remittance services, case to case transfers
- Current account, deposit account, savings accounts
- Regular account balance statement
- Insurance and endowment policy
- Cash withdrawal (POS), cash dispenser (ATM)
- Enquiry on account balance
- Collect deposits in domestic and foreign currency
- Manage existing portfolios
- Investment advice
- Mobilebank services – call centres
- Private banking
- Home banking
- Hire purchase
- Leasing
- Lease purchase
- Forfeiting
- Factoring
- Risk analysis
- Foreign currency transfers and exchange
- Pension fund
- Securities trading