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How does the stock exchange work?

How does the stock exchange work?

Many times we have heard stories of people who made their fortune by buying and selling shares in companies. In order to properly invest income and not be a victim of fraudsters, it is necessary to understand the mechanism of the securities market.

What is a stock exchange?

The stock exchange is an organized market for trading securities. The place where the seller and the buyer of securities meet.

For example, the largest stock exchanges in the world include NYSENASDAQLSE and others.

The Republican Stock Exchange “Toshkent”  is the only stock exchange on the territory of the Republic of Uzbekistan. It was established on April 8, 1994. Today, shares of more than 99 companies and 10 bond issues of 4 issuers ( companies issuing shares )are traded on it.

Registered securities are placed on the stock exchange, where they can be purchased by individuals and legal entities – investors.

The Central Securities Depository is an organization that provides a unified system of storage, maintenance, accounting of the movement of securities and also provides other related services. (The Central Securities Depository carries out its activities in accordance with the Resolution of the Cabinet of Ministers No. 263 dated May 21, 1999 “On the organization and activities of the Central Securities Depository” without compulsory licensing )

Who regulates the activities of the stock exchange?

The regulator is an independent organization that makes sure that everything in the market, in this case, the stock exchange, is carried out legally. In Uzbekistan, these functions are performed by the Agency for the Development of the Capital Market of the Republic of Uzbekistan, which also licenses the activities of professional participants in the securities market (investment consultants, brokers, dealers, investment asset trustees).

What is a stock quote?

A share price is the market price of a share on a stock exchange, determined by supply and demand, and is dependent on many factors, such as a company’s net profit, the amount of previously paid dividends, the reputation of the firm and its place in the securities market.


Important! The quotes of the companies’ shares are constantly changing in real time and are reflected on the website of the RSE “Toshkent” in a special table called the “Exchange Quotation List”.


Each share has several prices at the same time:

First, it is the par price that is assigned to the share upon the issue. It is also called face value. The nominal price of a share matters only in relation to the income or dividends that the owner will receive on this share.

The market price of a share is determined by the supply and demand for the purchase and sale of these securities. It is usually defined as the average value of the prices of completed transactions or the closing price of the trading day (trading week).

Quoted prices – prices offered on exchanges by various sellers and buyers, at which transactions for the purchase or sale of securities were performed for a certain amount of time.

The stock exchange lists the securities of companies that have been included in the listing (exchange quotation list) – a special exchange procedure, which consists in checking the company’s compliance with the exchange requirements. The exchange checks the registration of the issue (issue) of securities and a report on its results, compliance with the legislation of the Republic of Uzbekistan, disclosure of information about its activities and a number of other requirements.