Stocks, also known as equity are a security representing a holder’s proportionate ownership of a corporation.
Stockholders are therefore entitled to that portion of the corporation’s assets and earnings.
Companies issue stock in order to raise capital to finance future growth.
Types Of Stock
There are two types of stocks: common and preferred stock.
1.) Common stock comes with the ability to cast votes at shareholder meetings and the right to receive dividends.
2.) Preferred stock doesn’t come with the right to vote, but does come with the right to receive dividends prior to common stockholders and higher priority in getting paid back if the company goes bankrupt and is liquidated.
What Is A Stock? Further Things To Know About Stocks
Although the bond market is larger than the stock exchange the stock market receives more press.
Historically, stocks have had a higher return than other types of investments over time.
The trade of stock is regulated by the Uganda Securities Exchange (USE) which is the principal stock exchange of Uganda. It was founded in June 1997, in order to protect investors by maintaining a fair and orderly functioning of the securities markets.
Capital Markets Authority
The USE is operated under the jurisdiction of Uganda’s Capital Markets Authority, which in turn reports to the Bank of Uganda, Uganda’s central bank. The exchange opened to trading in January 1998. At that time, the exchange had just one listing, a bond issued by the East African Development Bank.
Who can trade on exchange?
Anyone can buy or sell at one of the quoted prices or respond with a different quote. This creates an even playing field, because traders can see market movements clearly and make more accurate predictions of their own – especially as the information supplied by an exchange is available to everyone.
How Does Uganda Securities Exchange Work? It is an organized market where buyers and sellers of securities meet as dealers/brokers represent them and acquire or sell securities. It is a market in which securities are traded by members of the Exchange who may act as both Agents (Brokers) and as Principals (Dealers).