[0:18]Today, our is something to do with the building your vocabulary. In order to understand the various chapters in this training program in this model, you need to build your technical vocabulary. And this is the aim of that first chapter, the elements of a stock market. Our starting point is stock exchanges. Why stock exchanges? Because in this model, we simply focus on the stock exchanges rather than the other, rather than including all the various components of capital markets. We'll try to understand the micro structure, the trading organization, the trading interaction between buyers and sellers in stock exchanges. That's why our starting point is the stock exchange. What is a stock exchange? Stock exchange is simply a set of facilities. So an exchange is a company that provides a set of trading facilities. Those facilities include the trading floor, the software that defines the market and allows people to trade. Simply, uh, think of it as a company, as an enterprise, that gives people, people the opportunity to trade by providing a set of trading facilities including the stock exchange building, the stock exchange floor, floor that's the area used to trade, because don't forget that before or after the development of technologies, information and communication technologies, traders were obliged to go to the physically present in the market in order to trade. And the place where trade is called the trading floor. So floor is among the facilities provided by stock exchanges. Now, since this trading activity became virtual, the software, the trading program, the trading computer system, the trading computer program used in order to make it possible for people to virtually trade is also among those facilities. So please, stock exchanges are companies, are business like any other business, that company company provides services, variety of services. And of course, a variety of facilities including the stock exchange building, the stock exchange floor, and all the trading, the software and computer system used to make it possible for people to buy and sell securities. The stock exchange makes the trading process structured, monitored and standardized. Why structured? Because when we talk about stock exchanges or any other component of capital markets, this is an organized environment. Stock exchanges organize the meeting, organize the interaction, the virtual interaction and the virtual meeting between potential sellers and potential buyers. So, in this spirit of organization, in this spirit of structure, we will simply say and conclude that stock exchanges make the trading process structured. Why monitored? Monitored simply because all the trading process is supervised by the stock exchange officials. Stock exchange officials are people who have the major role of supervising the trading process and may make sure that all the players in the market respect the rules and procedures of trading. That's why we'll simply make it possible, of course, uh, for all the traders to trade on a structured basis, and of course, to respect the trading rules and procedures. This is the role of the market supervisors, and that's why we will simply say the stock exchanges make the trading process monitored. Why standardized?
[5:00]Here we have a sort of standardization, if you want to buy or sell shares, or if you want to buy or sell securities in any compartment of capital market, the trading process is standardized because you will use the same rules and procedures of trading. Whatever the stock is, whatever the security is. Please, keep in your mind that stock exchanges make the trading process standardized, structured and monitored.
[5:32]Stock exchanges are companies, are enterprises, are businesses. They provide a variety of services, and you have to pay in order to get those services. The first service and the basic service, the starting point of services provided by stock exchanges is the listing service. When a company is listed on an exchange, we will simply say that the company goes public. A part of the company's shares or a part of the company's stock became, becomes available to be bought and sold by traders in the market. If I am looking for new trader, new shareholders in my company, if I want to rise fund in stock exchanges, I will simply, my company will go public. It will be a part of the stock exchange's listing, and a part of their of its shares will become publicly available to be traded, to be bought and sold by traders.
[6:45]The second service, this is the trading service. All the traders, physical persons, legal persons, if they want if you want to they want to buy or sell securities, buy or sell shares in stock exchanges, they need that trading infrastructure, that trading facilities. So, we will simply say that stock exchanges provide trading activity, trading services. Because we have stock exchanges, we can buy and sell securities on an organized basis, of course, structured basis. Don't forget that listing services and trading services, we are talking about services sold by the stock exchanges. We have to pay listing fees, and also we have to pay trading fees. Stock exchanges are also data providers. Why data providers? Because they have a big data related to the details of the trading process and the details of the companies listed in the stock exchange. They sell that data to the major international agency news like Bloomberg, like uh Reuters, and this is the third service provided by stock exchanges. Stock exchanges, as a matter of recap, stock exchanges make the trading process, structured, monitored, and standardized. Stock exchanges provide three major services, listing service, trading service, and data providing service. Stock exchanges are companies at the end of the day that provide trading facilities. The building of the company is a trading facilities. The floor is a trading facilities, the building is a trading facility, and also now we are talking about a virtual trading process. All the computer system, all the quoting system used to get connected to make it possible for people to get connected to their brokers and to the market is the definition of the stock exchange or the physical definition of the stock exchange.
[9:07]Now, investor's perception of a company is affected by the stock exchange that it is listed on. Why simply? Because I can have an idea, if I want to build my portfolio, I can have an idea about that company by simply analyzing the stock exchange in in which the company is listed.
[9:32]So, if we take the example of New York stock exchange, New York stock exchange listing, or New York stock exchange listed companies carry association between companies, carry association or listing carries association between seniority and stability. Why seniority? Because if in that listing, in that market, the listed companies are large companies with years and years of experience in their sector of activity. That's why we use the term seniority, large company with years of experience in their field are listed in the New York stock exchange. Also, they are characterized by their stability, their stability, I would say their stability at the financial level. Why at the financial level? Because they are characterized by their own foundation or financial foundations with foundations, with stable activity, with a stable net income, with a stable indicators at the financial level. So, here, if simply I spot a company which is listed in the New York Stock Exchange, my conclusion would be simply that company is characterized by its seniority and its stability. We find there the largest and oldest industrial and financial companies around the world and especially in the United States, like the banks, like the the, I would say, the big companies of the automotive sector, and so on. Whereas in the Nasdaq Nasdaq stock exchange, companies there carry association between entrepreneurship and growth. Why entrepreneurship? Because here we are talking about startups in the technological sector, in the sector of high-tech. And also, those companies listed in the Nasdaq are characterized by their high growth potential. We find there companies who have the following, who have the following features. They are younger, smaller, and more concentrated in technology. And of course, as a portfolio manager, I will include in my portfolio some stable companies listed in the in the New York Stock Exchange. Why? Because here is a sort of safe zone in my portfolio. Don't forget that those companies have a growth potential, yeah, limited growth potential, but at the end of the day, their prices in the market will keep an upward trend generally speaking. Now, if we take the example of the New York, the Nasdaq listing, the problem here is, yeah, I can make high returns by investing a part of my resources in those companies. But of course, since they are characterized by their high level of volatility, I can also lose money. On a smaller scale, the scale of the Casablanca Stock Exchange. In Morocco, we have only one stock exchange, that's the Casablanca Stock Exchange. Large companies, like the companies of the banking sector, are listed in the main market. And small and medium-sized companies are listed in the alternative market. Why main market? Here, this is just a sort of qualification. So please, avoid the mistake to consider that we have two markets. No, when we talk about the main markets in the Casablanca stock exchange, and alternative markets in the Casablanca stock exchange, here they are simple level, simple classification system that make it possible for and easier for traders to make their decision in terms of defining the structures of their portfolio. So, the core of my portfolio will be will include some companies who are listed in the main markets or classified in the main market.
[15:03]And also, this is it's practical to include some smaller companies with higher risk, but also with higher ability to increase in terms of their prices and in terms of their market value.
[15:37]Markets or the large companies, the main market, and the alternative market are also are simply a sort of classification that make it easier to take to make the decision of investment.
