Inglés empresarial

the stock exchange
When a company needs to raise money in order to grow, it can choose between two different options. It can
issue shares (or parts of its capital) which can be bought by the general public. These shares are know as
equities or ordinary shares, and are the most common form of share. When you buy shares in a company,
you become a shareholder and own a part of (or have a stake) that company. As part owner of a company,
you can therefore make or lose money depending on the company's profits. If the company does make profits,
it pays a sum of money per share, known as a dividend, to its shareholders usually twice a year. Companies
can also borrow money from a bank or from the general public by issuing bonds which are loans with a fixed
amount of interest to be paid each year.
Each year, billions of pounds of shares are bought or sold (or traded) on the London Stock Exchange. In
addition to the shares mentioned above, government stocks, or gilt−edged securities are also traded. These
are loans issued by the government to help it fund its spending (buildings roads and hospital, defence, etc....)
* FUNCTIONS OF THE STOCK EXCHANGE
The Stock Exchanged has several functions. It is a market for both new and second−hand shares, debentures
and Government securities. It is also responsible for supervising new issues of shares when firms become
public limited companies.
By providing a market for new and second−hand shares the Stock Exchanged makes it possible for firms to
raise capital, and for investors to convert their shares into cash. Without a market of this type it would be more
difficult for companies to persuade people to invest their money in new shares.
In December 1987 there were 3062 companies listed on the Stock Exchange. 400 of these were quoted only
on the Unlisted Securities Market (USM) and the Third Market. These are intended to allow shares in the
smaller companies to be traded on the exchange. The third market was disbanded in 1990.
* THE BIG BANG
Until October 1986 there were two types of members of Stock Exchanged.
1.− Brokers worked as agents for buyers and sellers, who could only trade in shares through a broker. The
broker received a commission (which had a fixed minimum rate) for buying and selling shares.
2.− Jobbers bought and sold shares for themselves. They made their living from profit (called jobber's turn) on
their dealings.
The main feature of the system was single capacity. A person could only be a broker or a jobber. Brokers were
not allowed to buy or sell shares for themselves. Jobbers were not allowed to deal directly with the public.
This was to prevent members of the Stock Exchange from advising their clients to buy shares in which they
had a personal interest.
In October 1986 this system was completely changed by the Big Bang. The aim of the Big Bang was to make
dealing in shares more competitive and efficient. The key changes were:
1.− All members could now operate in dual capacity, trading shares for themselves and clients.
2.− Scales of minimum commission were abolished.
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3.− Corporate membership by banks and financial institutions was allowed. Members can now have limited
liability.
4.− Protection for investors was increased, particularly through electronic recording of all transactions.
5.− A computerised dealing system called the Stock Exchange Automated Quotation (SEAQ) system was
established.
There is now only one type of Stock Exchange member − the broker/dealer. Some members will act as
market−makers in particular types of shares, such as oil or chemicals, buying and selling these shares on a
regular basis.
All members can deal with the public, but they must always tell the client wether they are buying or selling
the shares themselves, or for a client.
The SEAQ shows information on share prices which until Big Bang was only available on the Stock
Exchange floor. The information is shown on television screens in brokers´ offices anywhere in the UK or
overseas giving them all access to simultaneously.
The information is update continuously as market makers inform the SEAQ central system of trading of what
has taken place. The introduction of this sophisticated system has resulted in trading taking place over a
television screen rather than on the market floor.
The SEAQ system is designed to ensure that the client gets the best price available at the time.
THE ECONOMY OF THE BIG APPLE.
In many countries the capital city is also the commercial and financial heart of the nation. But in the USA,
though Washington is undoubtedly the center of political life, it is New York where the most money changes
hands.
Banking and shipping have been important to New York City since Colonial times, and today, the city is a
powerful financial center. Some say it is the financial center of the world. New York banks finance one−third
of the USA's foreign trade. Wall Street, in lower Manhattan, is the home of the New York Stock Exchange,
the America Stock Exchange, and major commodity exchanges which establish world prices for such products
as silver, rubber, cotton, cocoa and coffee. Because of New York's banks and stock exchanges, 2.500 major
American corporations have their home offices there. This is twice as many corporations as there are in
second−ranking Chicago. Over 60 % of al foreign corporations doing business in the USA have established
their headquarters in The Big Apple.
New York is the USA's most profitable port. Every 28 minutes, on average, an ocean going vessel enters or
leaves the port with cargo or passengers. Each year the port handles 18.000 ships movements. Among the
world's great ports only Rotterdam handles more cargo than New York. Some 450.000 passengers enter and
leave the port annually aboard such great ships as the Queen Elizabeth 2, Rotterdam, United States, Leonardo
Da Vinci, Royal Viking, Gripsholm and Mikhail Lermontov. The fact that New York is responsible for 15 %
of the country's overseas commerce has attracted the leading marine insurance companies to set up offices
there, and has stimulated the development of warehousing and transportation.
What makes New York a great port? Besides being deep and wide, it is always free of ice and usually free of
fog. There is also a relatively slight difference between high and low tide which makes it possible for ships to
leave and enter the harbour at any time of night or day.
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New York is an important fashion center. If, as you read this, you are wearing American−made clothes, it is
quite likely that they were manufactured in The Big Apple. Almost 11% of all American apparel is made in
New York.
New York is the nation's leader in communications and in service industries. Over 4.000 companies supplying
such business services as advertising, management consulting, public relations and equipment rental are
located in the city. Close to 8 % of the USA's printing and publishing of books and magazines is done in New
York. All the national television networks, many bureaus of American and foreign newspapers, and two of the
major news services have their home in The Big Apple.
Finally, there is in New York's immense tourist industry. In 1982, 17 million tourist spent $ 5 billion in the
city's hotels, restaurants, theaters, sports stadiums, department stores and specialty shops.
The American Stock Exchange
The American Stock Exchange is on Wall Street in New York, one of the greatest financial centers of the
world.
Wall Street also has its own language. The largest investment company in the world, Merril, Lynch, Pierce,
Fenner and Smith Incorporated, is called We or We, the people, or The Thundering Herd.
But Wall Street does not only deal with big investors. 41% of investors have quite small sums of money
(about $5,000) invested in the Stock Exchange.
Wall Street made history on 28 the October 1929 when prices suddenly fell. From then until July 1932, prices
went on going down week after week and month after month. On September 29th 1929 a share in General
Motors cost $73. On 8th July went bankrupt, and a large number of people lost all their investments.
The Wall Street share index is called the Dow Jones Index. If you want to know what the Dow Jones Index. If
you want to know what the Dow Jones Index at this moment, you can call this New York number and listen to
the recording: New York 976 4141.
BANKS IN THE BIG APPLE
There are banks on practically every street corner of New York City. Most stay open weekdays from 9 o'clock
to 3 o'clock, at least one evening a week, and often on Saturday morning. All will be most happy to cash your
traveller's cheques, but most reluctant to cash your personal checks. This is true in stores and restaurants as
well. A sign frequently seen on cash registers in the Big Apple reads: In God We Trust. All Others Pay Cash.
Foreign currency may be exchanged for dollars at most commercial banks, airports, the East Side Air
Terminal and Grand Central Station.
Warning: Eurocheques are seldom if ever welcomed, so you would be wise to buy traveller's cheques in U.S.
dollars before you arrive in the city.
LONDON STOCK EXCHANGE
The London Stock Exchange, which opened in 1801, is the oldest stock exchange in the world. There are two
kinds of members of the Stock Exchange. First, there are Stockbrokers who buy and sell stocks and shares for
people who are investing in the stock exchange. Secondly, there are jobbers who decide on the prices of
stocks and shares.
The Stock Exchange has its own strange language. A bull is a person who buys stocks and shares, and sells
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them at an increased price. A stag buys new stocks and shares as soon as they come out and sells them at a
higher price to investors.
Every hour, the Financial Times Index gives the average figure of the price changes of the thirty most
important shares. If you want to know what the Financial Times Index is at this moment you can call this
London number and listen to the recording: London 246 8026.
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