Stocks are now nearly 400 years old. The earliest stock market arose in 1602 when the Dutch and British established overseas trading companies. These companies are established by raising share capital and have obvious characteristics of joint-stock companies; they have legal person status; a board of directors is established; the general meeting of shareholders is the company's highest authority; dividends are distributed according to shares; and a limited liability system is implemented. The successful operation and rapid development of the joint-stock company made more enterprises follow suit.
historical background
- Stocks appeared in Europe in the 17th century
- At that time, large capitalist industries were flourishing, and many enterprises were expanding their production scale.
- However, the main funds of enterprises are limited, and they are often unable to expand the production scale in time due to the capital bottleneck, which is very annoying.
- In order to further expand the production scale, business operators must find ways to raise more funds, so they thought of raising a large amount of funds in the society by issuing shares.
- They issue shares of their own enterprises to cooperate with others, jointly invest in enterprises to expand production scale, and return the profits to investors who invest in their enterprises according to the investment proportion after obtaining operating profits.
In this way, the enterprise operators get the funds to expand the production scale, and the social investors can also share the operating results of the enterprise, so the form of stock investment came into being.
The first joint-stock company - Netherlands East India Company
- The earliest joint-stock company in the world was the East India Company of the Netherlands, which was born in 1602.
- The East India Company is a company engaged in maritime trade and piracy. Its main job is to plunder materials from various countries and bring them back to the Netherlands for sale. In addition, it also sells goods rich in its own country but scarce in other countries at high prices abroad, so as to earn a price difference.
Although the company is profitable, its business risk is very high, and its initial investment is also very high. They have to spend a lot of money to replenish ammunition, food and repair ships before each expedition. In addition, they may face various harsh natural environments at sea during the voyage, with the most serious consequences even ship destruction and human death. Therefore, the company's operation racked its brains to think about how to pass on the high expenses and operational risks of Qianhai.
Finally one day, the East India Company found that the public were very eager for the high profits of the industry they were engaged in, and they were very willing to invest. So they invented the investment and financing form of stock. They converted the money invested by ordinary people into shares for statistics, and gave investors a piece of paper as the investment voucher (recording the invested capital and shares). After they returned with full load, they returned the profits to investors according to the number of shares, which is called dividend. If people are in urgent need of money, they can't ask the East India Company for the money they invested, but they can sell their shares to other investors at the current market price in the specified trading market.
Today, the essence of stock is almost the same as that of the East India Company. The stock we are talking about now is the investment certificate. The stock trading market is today's Shanghai and Shenzhen Stock Exchanges. Our investors are shareholders of listed companies. The purpose of issuing shares by listed companies is to raise funds. The current amount of a stock and the price of each share when buying and selling the stock we are talking about are the market price of the stock.
Development stage of international securities market:
The embryonic stage: the 15th century to the 20th century
Preliminary development stage: early 20th century
Stagnant stage: 1929-1960
Recovery stage: 1960s
Accelerated development stage: since 1970s
summary
Whether at home or abroad, the emergence of stocks is to meet the demand of enterprises for capital in the process of production and operation
As investors, we become shareholders of the enterprise after buying the shares of the enterprise, and can enjoy the profits brought by the development of the enterprise.
Stock is a product of social development, which is of great significance. It makes enterprises no longer restricted by capital bottlenecks, promotes the growth of enterprises, and promotes social progress.
