This research will investigate the comparison between Ho Chi Minh City Stock Exchange (HSX) and The New York Stock Exchange (NYSE) in terms of their operations and trading systems. Some recommendations are also made about what HSX could learn from the NYSE.
1.2 Background and introduction to the research
The financial market plays an integral role in the world economy. This market includes foreign exchange markets, stock markets and capital markets. Of these, the stock market, which comprises various stock exchanges, plays a leading role in the function of the financial market (Dziawgo, 2012). Since there is a great number of issues such as financial crisis and recent global economic downturn, Vietnam still has heaps …show more content…
Designated Market Maker (DMM), which is the market model of NYSE, have duties to control and manage fair and orderly markets for their securities (NYSE Trading Information, 2016). Because of the vast volume of trades in 2007, the trading system of NYSE transferred from auction market to a hybrid including the auction method and an electronic trading method However, this market is still considered the last bastion where stocks are still auctioned on the trading floor (Whickson, 2016).
The HSX is led by the Ministry of Finance and empowered to manage market development, issuance management, international cooperation, resources management, etc. (Sustainable Stock Exchanges, 2013). The trading system of HSX includes Order Matching Trading and Put Through Trading systems (HOSE trading regulations, …show more content…
Through this research project, the researcher also include the influences of HSX and NYSE to economic, political and social factors.
3.1 Economic factors
Stock Market plays an integral role in shaping the economy of each nation. The higher the rate of stock market growth is, the more growth percentage results in the economy. Specifically, stock markets help to connect providers of capital with enterprises and countries within HSX and NYSE.
3.2 Political factors
The government plays an important role in the operation of the stock exchange. Market can be easily influenced by some regulations imposed by Vietnamese or U.S governemnt on taxation, interest rates and quotas so on. Furthermore, the amount of providers, investors and enterprises investing in a market also strongly depends upon the policies delivered by government of each country.
3.3 Social factors
There are lots of social factors affecting the stock market and wealth of an economy. One of the most common in Vietnam and America is the unemployment rate. The lower unemployment rate will lead to the higher economic output, savings and retail sales. As a result, the amount of stocks increase or decrease with positive or negative employment