Currency Wars: “Beggar Thy Neighbor” Policy
February 12, 2025
The Bank of Japan has recently decided that it will cut its rate below the zero percent mark. Bank of Canada has also hinted that it may also join the Bank of Japan in this extreme step and drop its interest rates below zero as well. However, most average people in the world are dumbfounded […]
As discussed in the previous article, capital rationing is a form of capital budgeting. In capital rationing we change the unlimited capital assumption of capital budgeting and we try to choose projects with the finite capital that we have on hand. This finite capital may be in the form of capital that the firm already […]
In the previous article we studied that there are two types of deposits that banks use to fund their lending operations. We studied in detail about the different types of demand deposits. However, demand deposits are considered to be vulnerable sources of finance. Depositors are likely to pull out the funds that form a part […]
Technology has touched every aspect of our lives in the recent years and banking has been no exception. Huge strides made by information technology have allowed banks to provide much better levels of service to their customers at drastically lower costs. The deployment of technology has also changed the channels via which customers interact with […]
We are now aware of the fact that investment markets are not driven by mathematical decisions alone. They are heavily influenced by the emotional quotient of investors. In fact, a large number of successful investors attribute their success to their ability to manage their emotions. This is done by understanding the different types of behavioral […]
Uber and Pinterest are amongst the hottest tech start-ups in the world right now. This is why the fact that both of these companies have chosen the New York Stock Exchange (NYSE) to list their shares on is being seen as great news for the exchange. The NYSE has beaten the NASDAQ as well as many foreign stock exchanges in order to achieve this feat. This is remarkable from the point of view of NYSE. However, it also raises questions about how companies choose the stock exchange where they plan first to list their shares.
In this article, we will have a closer look at some of the factors which are commonly considered by companies before they zero down on a stock exchange.
About a century ago, the entire world was not well developed. This is the reason that there was a lot of difference in the operational performance of different stock exchanges. The operational charge at some stock exchanges was much higher when compared to the others. Also, there was a substantial difference in the liquidity offered at different exchanges.
However, in the past couple of decades, these differences have all but vanished. Stock exchanges across the world now work electronically. This allows buyers to trade seamlessly without experiencing much of a difference.
Hence, the factors which affect a company’s choice of stock exchanges has undergone a huge change over the past few years:
The factors which now play an important role in the choice of stock exchange have been listed below
However, the listing of shares on one exchange does not mean that it cannot be traded on the other exchanges. It just means that the company first chose to sell their shares on a certain exchange. Over a period of time, the shares of big companies are usually sold at all exchanges at almost the same price. Every minor price differences are exploited by arbitrageurs looking to make a quick buck.
Your email address will not be published. Required fields are marked *