Investment Sight

The places that you operate determine your financial worth

There are quite a significant number of variations in the securities industries across the globe. No one region will replicate the identical outcomes of another region. This is a desirable situation in my opinion. I believe that the securities markets have to take account of local opinion and circumstances in order to operate effectively.

They cannot operate completely independent of the economic situation of their surroundings. That is when you have economies that give a false impression of development which is not justified when you look at the real economic data.

There is also the small matter of managing risk. If you have uniformity in practice across the globe, it is likely that if one part of the business fails then it will be replicated across the world. When the economic downturn was at its worst, we took some comfort from the fact that certain prudent nations were not affected.

At least the whole financial system was not in total collapse. Even the economies that had been derided for their so called socialist tendencies experienced a level of respect for the way that they dealt with the situation. Therefore the regional specialization of the securities markets is much welcome.

Other causes of variation

The disparity in income levels across the world mean that it is inevitable that there will be differences in the securities industries across geographical locations. For example the London stock exchange cannot be operating in the same vein as the Kenya stock exchange. The volumes of currency that they will be handling will be totally different. The potential customer base will also differ significantly. To try and merge them is just pure fantasy. Even a merger with the Paris stock exchange is not possible yet they are both operating in countries of equivalent wealth. What then are the chances of the system working where the wealth differential is so great as to be almost impossible to breach?

If we accept that the securities markets is also linked to the type of industries that are being invested in, we can then understand some of the regional variations. Each region will have a certain emphasis on particular products. The securities market there will reflect this emphasis. For example if you are talking of Russia, coal and gas will be a major feature of the stock exchange there. On the other hand if you are talking about Saudi Arabia, oil will be the main feature on the stock exchange. If investors wish to jump international borders, then they are free to do so in the knowledge that money no longer has borders.

Conclusion

In conclusion I would say that the diversity of operation in securities industries across the globe is a welcome phenomenon. It allows for the proper accounting of national interests and national idiosyncrasies. It also forms a good basis for international trade because people can get alternatives depending on the region in which they wish to invest.  The uniformity of the securities industries is an ideal that is not likely to ever materialize in our lifetime.