Relation between the Stock Market, Currency Market and Property Market - Coursework Example

The stock market, the currency market, and the property market are perhaps the three largest markets in terms of the size of business transactions in a country. People around the world invest money in these commodities with the expectation of getting a fair return on their investment. The first item of the commodity to be traded was undoubtedly the property market. This was followed by the stock market in the 1750s and followed by the present form of currency market in 1973.

There indeed exists a relationship between the three. It has to be seen whether a rise or fall in the stock value affects the other two or will a change in the value of the currency market affects the stock market or property market. Similarly, will a change in the property market affect the stock and currency market?

The stock market and its early days: Evidence show that trading in stock in the United Kingdom existed even in the sixteenth century. Trading in stocks during that period was much higher in Amsterdam and Paris and the oldest share issue in history is the issue of was in 1606 in Amsterdam by the company Camere Amsterdam and it was called Dutch Vereinigte Oostindische Compagnie (VOC) share certificate. After another two years he could safely assume that besides the second VOC share (held by the Amsterdam Stock Exchange) and other securities from the company, his piece was the oldest share certificate in the world. (Oldest Share in the World. 1606). Though no stock exchange existed until the opening of the London stock exchange, there was a market for securities known as the Royal exchange. In those days most companies formed out of joint-stock were engaged in international trade and shipping. The East India Company, The Hudson Bay Company, and the Royal African Companies were the major existing at that time.

Gradually, joint-stock companies in other areas of business like banking and water supply Till 1689, only about fifteen joint-stock companies existed in Britain, but this rose rapidly to 150 within a span of seven years. The French Revolution caused the economy in France to collapse and as a result, trading in stocks increased on volume in England The London Stock Exchange was officially started in 1772 with the purpose of a properly organized structure to control the growing number of companies and the volume of trade in securities.