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FUNCTIONS OF THE SECURITIES MARKETS

The  securities  markets  perform  very  important  functions  that  benefit  the  economy, the corporations and the individual investors

To The Investor These Are Some Of The Benefits:

a) It enables investors to spread their risk through diversification. The existing of a stock market makes it possible for an investor to spread and diversify his/her risk by holding a well-diversified portfolio.

b) It provides a liquid investment opportunity. Liquidity is very important to  every  investor.  This  is  because  every  investor  wants  to  convert  his/her investment  quickly  into  cash  when  the  need  arises.  The  existing  of  stock  market makes it possible because any investor with a security that is traded  on  the  security  market  can  easily  dispose  of  such  asset  when  the  need  arises without having to lose large part of  the principal investment or having  to incur high commission.

To The Corporation And Other Investment Seekers, The Benefits Are:

a) Securities market (stock exchange) makes access to investment capital  possible.  Firms  in  need  of  investment  capital  can  raise  it  through  the  exchange.

b) It provides opportunity for fast growing and young companies to obtain  finance. Such companies can raise capital through the issue of shares (initial public offer).

c) It creates  an  opportunity  for  corporations  to  become  known  to national  and  international  investors.  Ashanti  Goldfields  Company  (AGC)  is listed on the New  York Stock Exchange. This has made it an international firm  making  it  possible  for  people  who  do  not  know  Ghana  to  know  and invest in AGC.

Other Functions Of The Stock Market Are:

a) It provides continuous market for the purchase and sale of securities.

b) It provides  a  mechanism  for  determining  a  fair  market  price  for securities traded on the exchange.

c) It imposes  some  standardization  regarding  the  release  of  financial information by companies whose securities are traded on the exchange. For example,  all  listed  companies  are  supposed  to  publish  their  audited  final accounts each year.

d) It attempts  to  protect  investors  who  maintain  account  at  member brokerage  firms.  It  does  this  by  regulating  trading  practices  and  imposing financial standards upon member firms.

TYPES OF THE SECURITIES MARKET

MONEY MARKET
The money market is designed for the provision of short-term funds. It is an institution through which corporations and individuals with funds meet the needs of borrowers with temporary shortage of funds. A security or loan
maturing within one year or less is considered as a money market instrument. One major function of the money market is to finance the working capital needs of corporations and provide the government with short-term fund. The money market also supplies funds for speculative buying of securities and commodities.

CAPITAL MARKET
Capital markets are designed to finance long-term investment by government, corporations and households. Securities traded in the capital market take more than one year to mature and range in size from small loans to multi-million credits. For instance, if the government wants to undertake road construction, it will have to go for a long-term loan. A company that wants to embark on an expansion of its factory will also need to finance such an activity through a long-term source of fund such as issue of stocks or contracting long-term loan through the capital market.

THE SECURITIES MARKET

Introduction
Companies, government and international organizations issue securities. Such securities are issued to raise funds for the activities of the issuer. When securities are issued they have to be traded. It is an advantage to have an organization that brings into contact potential buyers and potential sellers of securities. This organization is called the Stock Exchange.

The Stock Exchange is a place where securities are traded. The Stock Exchange can be a physical place, it can be a system of telephone links, or as is becoming more common it can be a network of computers. The securities market can be divided into different segments based on the characteristics of the securities being traded or the type of transaction that takes place in the market or the needs of investors. For example we have Money Market and Capital Market. The securities market can also be viewed as Primary Market or Secondary market.

Challenges of E-marketing for SMEs in Africa

Despite the above-mentioned prospects that e-marketing offers for SMEs in Africa, its challenges cannot be overlooked. They need to be stated so that they can be addressed appropriately so they can procure maximum benefits for these SMEs.

Bostanshirin gives the following points as some challenges that e-marketing for SMEs in Africa can pose:

4. Lack of trust:

Closely related with the problem of security and privacy is the issue of lack of trust on the part of customers which has been recognized as a great challenge on the way of online marketing growth. Today, despite the rapid growth of online transactions several people still mistrust electronic methods of paying and still have doubt whether the purchased items will be delivered or not. On the other hand prevalence of online fraud has made customers hold negative or doubtful attitudes towards online transactions. So much more clearly remains to be done to build up the trust and convince the customers that interactions which take place in the virtual world are as real and honest as those happen in the real, offline world.

No doubt, it is an on-going, long process and needs more time to realize. It should be stressed that unless this trust has not been built, internet marketing cannot be taken advantage from to its fullest potential. So it is imperative for those in charge of online marketing to understand the reality of new virtual world. One of the prominent realities of this new world is that “today trust and customer power have partnered to revolutionize marketing. Marketers and IT managers are challenged with the task of changing the online climate in order to gain retain online consumers. This has generated tremendous interest in learning about online trust and in developing new site designs to respond to the increased power of customers” (Urban, 2008).

Conclusion

As stated earlier, the internet has greatly changed every aspect of our lives. This paper introduced with the probable advancement of SMEs in Africa, and how it creates the middle class with wealth worth considered. SMEs in Africa can also be beneficial to the global economy if it is developed in the next decade; one of the tools being e-marketing. This paper delved into the prospects and challenges that e-marketing can give to SMEs in Africa. Some of the challenges posed by e-marketing can be turned into opportunities if looked into efficiently.

Challenges of E-marketing for SMEs in Africa

Despite the above-mentioned prospects that e-marketing offers for SMEs in Africa, its challenges cannot be overlooked. They need to be stated so that they can be addressed appropriately so they can procure maximum benefits for these SMEs.

Bostanshirin gives the following points as some challenges that e-marketing for SMEs in Africa can pose:

3. Security and Privacy:

Information privacy is among major topics to be taken into consideration in today’s evolving electronic world. It is clear enough that nowadays customers’ data can easily be shared with other companies without asking for their permission. Moreover, their more crucial personal data such as usernames and passwords are not immune from hackers (Lantos, 2011).

Another related problem is spams and pop-up ads which is considered by majority of online customers an instance of intrusion of privacy (Drozdenko & Drake, 2002). These security and privacy issues are among challenges in online marketing. Effective internet marketing, therefore, depends on resolving the related problems in this regard. The major dimension with respect to privacy is the choice or consent. This dimension has its roots in this belief that consumers whose data have been collected by the respective company should have control over the ways in which their information is used. Especially they also should be granted the right to have control “over how their personal information is used beyond the purpose for which it was collected”.

Prospects of E-marketing for SMEs in Africa

E-marketing has the capability of offering numerous benefits to SMEs in Africa. Using the research conducted by Bostanshirin (2014), the prospects that e-marketing offers to SMEs in Africa include the following:

6. Trackability:

Another aspect of the online marketing is its possibility of tracking. Internet enables measurement of everything taking place on it. The number of clicks that a particular promotional piece receives and amount of website traffic is easily measured. In this way, the marketer is enabled to track the visitors to their website and understand their behaviour. Internet also allows the companies to find out whether their campaigns are working or not, the kind of customers that are interested in their products, and they are from. The ability to track online customers increases dramatically due to the fact that “internet constitutes the most accountable media ever.

Introduction

Africa, despite the fact that it has the most number of developing nations, promises to be the world’s exciting economic frontier, transforming the states of nations and hope to a new generation of accomplished and engaged youth (Filomeno de Sousa dos Santos, 2015). According to the International Monetary Fund (IMF), the number of Africans joining the working age population will exceed that of the rest combined by 2035 (Vollgraaf, 2015).

For this to happen, it largely depends on the vigorous flourish in, and the continuous empowerment of, regional Small and Medium-sized Enterprises (SMEs) and young entrepreneurs. According to OECD (2005), SMEs are non-subsidiary, independent firms which employ less than a given number of employees, varying across countries but usually the upper limit being 250 employees.

In Africa, it is without a doubt that the number of SMEs exceeds the large companies by a wide margin and also creates around 80% of the region’s employment. SMEs are also said to be responsible for driving innovation and competition in many economic sectors, establishing a new middle class and fueling demand for new goods and services. This scale of transformation should not be underestimated (Filomeno de Sousa dos Santos, 2015).

[to be continued…]

INVESTING IN A FUND

A fund is an investment vehicle which pools the money of investors and invests it according to a defined set of investment objectives.

Investing in a managed fund can avoid some of the problems of buying shares direct. As well as removing the research required, funds can invest in a much wider variety of companies and assets than you would normally be able to. This is because the money contributed by all the investors in the fund are ‘pooled’ together to buy collectively and share dealing costs. This spreads the risk, reduces the possibility of large losses, and can increase the chances that your money will grow.

HOW DO I BALANCE RISKS WITH REWARDS?
The general rule with investment is, the greater the risk, the greater the potential reward. Before any investment, you should consider the risk and your attitude towards it. This is a personal matter, and everyone is different.

Some people choose to invest only in low risk investments, while others favour higher risk products that offer the possibility of higher returns. Or you decide on a mixed approach to risk: for example, investing initially in low risk investments to give relatively strong protection for your capital.

With these more secure investments in place, you could then use any spare cash to invest in higher risks products which offer the possibility of higher returns – in effect, choosing a balance of lower risk and higher risk investments.

These are only sample strategies, however. The choice is yours, and you should always consider your options carefully and, where necessary, take professional advice before deciding on your investment approach.