B. Communicative situations

1. Round-table discussion:

• Is the stock market/stock exchange important to industry and the government?

• What part does the speculator play on the stock exchange?

• Do you own any shares? If so, say why. If not, explain your decision.

2. Make a short essay on the following:

1. People engaged at the stock exchange: market makers, bulls, bears, stags, speculators, specialists.

2. Existing types of stock exchange.

3. Stock market indices.

3. Prepare a short talk on the following:

   • The connection between the riskiness of securities and their rates of return. How can risk be reduced through diversification?

   • Classification of markets.

 READ AND DISCUSS

1. a) Supply the articles where necessary.

b) Write down 3-5 questions about the text.

c) Name the problems of emerging markets mentioned in the text and say which of them are typical of Ukraine.

In 1990 the fastest rising stock markets in ... world were those emerging in the developing countries. There are now more than 50 Stock exchanges in ... developing world: some are insignificant or dormant, others are active and growing.

It was once widely presumed that poor demand for securities would be the biggest handicap to ... emergence of stock markets in the developing world. There were not enough potential buyers in developing countries. However, it is now evident that there is generally ... adequate demand for securities, in both the primary and secondary markets, arising both from speculative interest and from ... portfolio needs of financial institutions.

Even if the emerging stock markets have some demand-side difficulties,... more general, continuing and severe problem has been ....insufficient supply of securities^ The chief, markets problem in developing countries is that the secondary; market for bonds and shares is often inactive. There are often not enough buyers and sellers to make ... steady market. Quite often institutional stockholders hold securities firmly matched against their future liabilities rather than engaging in frequent trade. When institutions do enter ... secondary market they may try to buy or sell m large lots, thus making a big price disturbance. As institutions amass large blocks of shares they may be tempted to exercise their market power, especially in... field of corporate takeovers.

Speculation has been common in most of the emerging stock markets and very noticeable because of … thinness of the markets. While the opportunity for speculation is one of the chief attractions of any stock market, the line between speculation and sharp practices is something hard to draw.

Priviliged placements, insider trading, short selling and other questionable practices have occurred throughout the developing world.

In these circumstances, ... pure theory of international trade suggests that stock markets would not be viable in all countries but would cluster at a few points of ... globe, determined by the location of factor skills and time zones.

Words you may need:

dormant – сплячий, бездіяльний

presume – припускати, вважати

handicap – нестача, перепона, перешкода

steady market – стійкий ринок

large lots – великі лоти

big price disturbance – істотне коливання цін

amass – накопичувати

takeover – поглинання (однієї компанії іншою)

thinness of the market – вузькість ринку

speculation – спекуляція (торгівля цінними паперами з метою отримання прибутку)

sharp practice – шахрайство, обдурювання

insider trading – незаконні операції із цінними паперами на основі „внутрішньої” інформації про діяльність компанії емітента

short selling – „короткий” продаж

viable – життєздатний

cluster – групуватись