Question

7 (a) It may be argued that information is the life-blood of an efficient stock market. Explain this proposition.

(b) Within the context of the ASX, explain the requirements and purpose of continuous reporting.

(c) Identify, using examples, different pieces of information that are regarded as being material and therefore should be reported to the stock exchange.

Answer 1

1.

Information is the life blood of the stock market. As there are large number of investors into the market and want to invest their money into the market to earn the good amount of profit. A good quality of information attracts the investors to make an investment into the market. And helps the market to grow frequently.

For eg. If an organisation is listed on the stock exchange and want to attract the investors towards it then the good quality of news into the market can help the organization to attract the investors to make the investment into that company into the market.

This will help the organization to increase the value of the share in to the market.

similarly if the any negative news comes into the market the negative news can bring the share price of that organisation down and the marker will show the low opening and the low closing of that stock.

Information plays an important role into the stock market. This is why it is called as the Life blood of the stock market. As a good information can give the investors profit and a negative news can the investors huge loss.

2.

With in the context of the ASX (Australia Stock Exchange) continuous reporting is done to be updated about the market information. This helps the exchange to keep a track on the moments of the market, This helps the exchange to do the daily settlement of the Buying and Selling of the stocks into the market.

The continuous reporting helps the exchange to keep all the transaction record happened into the market on that particular date.

3.

As we know how the Information plays an important role into the market and according to this the report is been provided to the exchange to keep the track record of the market.

A positive news is like a water into the sand that gives the market a good opening and helps the investors to earn the profit and also to attract the new investors into the market as well. Same if the new is negative the market shows the negative signal and investors have to face a loss.

This is the main reason that the Information is called as the Life Blood Of the Stock Market. As in stock market everything is totally depend on the information available into the market according to that the market reacts.