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New Options for Global Trading in Stocks (Part 2)

23 October 2007 - Features - Editor

New Options for Global Trading in Stocks (Part 1)

Values to Capture in Small and Medium Sector Stocks

Large trans-national corporations offer limited options for citizens to participate in stocks from other countries. Some companies have laws which require part local ownerships of all companies which operate in their territories. This is primarily why companies which originate in the first world also list affiliate organizations in Exchanges of other countries. However, international financial and trade organizations frown on such compulsions, so some global corporations have begun to de-list from country Exchanges.

Overall, domestic investors have limited avenues to participate in ownerships of stocks from other countries.

The limited options to own stocks of large international corporations do not in any event, cover the opportunities presented by small and medium sized domestic units. The nature of some enterprises encourages localization with niche approaches. Such stocks may represent exceptional values though they are not listed or traded globally. Enterprises engaged in local cultures and natural resources are prime examples of the values represented by stocks which are territorial domain leaders.

Bridging the North South Divide in the World of Stocks

Wealthy private investors and large financial institutions have unfair advantages in terms of global online investing. The facilities of Advance Depository Receipts, Promissory Notes, and Mutual Funds are some structural examples of how opportunities to gain from global trading in stocks are denied to ordinary citizens. This kind of discrimination against small investors may be self-defeating in the long run, because it prevents the broadening of the customer base of an Exchange. Countries which have realized this are at the vanguard of screen based transactions in stocks without national limits.


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