By Mahnaz Abdi

Promoting shareholder culture to elevate capital market’s role

September 25, 2021 - 16:34

TEHRAN- Secure investment is always one of the concerns of individuals in society. For a long time, people have been looking to make the best use of their savings and market resources, so that while maintaining its value against inflationary shocks, they can benefit from the growth of their capital by creating value.

Since economics includes all activities and equations related to the people livelihood, addressing economic concepts has a positive effect on providing economic analysis to individuals and changing the lifestyle of all sections of society.

One of the issues that lead to the development of social justice and increase of welfare in societies is raising public awareness of the realities of society and developing a culture of investment-making and paying attention to savings and investment through stock market.

The irreplaceable role of the stock and securities sector in business development and the relationship between this sector and the various productive, economic and social sectors reinforces the belief that making investment in the stock market is one of the main pillars of the economy and trade and is an unrivaled factor in increasing social welfare.

As culture has long played a key role in socio-economic activities, and the success of planning and economic policies is inconceivable regardless of the components of culture; so, given the influential role of the capital market in macroeconomic indicators, promoting the culture of investment-making and shareholding in this market is a necessity.

Now, due to the development and growth of the capital market in recent years, the development of such culture has become more necessary.

Culture for avoiding emotional behaviors

A prerequisite for the growth of the stock market is the development of an investment-making culture based on knowledge and awareness of economic conditions in the world and the country. By identifying investment condition and opportunities, people in the community can make rational decisions to maintain and increase their capital and avoid emotional behaviors.

By developing a shareholder culture, emotional behaviors in the market can be controlled while providing a better understanding of recognizing investment opportunities.

With the development of such culture in society, the growth of investment in the stock market and subsequent national production will certainly lead to a boom, which in turn will increase the wealth of the people, expand public welfare, reduce poverty and create employment.

A clear example for when the promotion of shareholder culture and economic knowledge is weak would be emotional and knowledgeless influx into the capital market during the boom and emotional exit during the recession.

 Role of socio-economic beliefs

The existence of fundamental beliefs among shareholders is part of the shareholding culture, as the fundamental beliefs in the minds of people in society are considered as the driving force in human activities.

Economic activity in the capital market for a shareholder requires the internalization of a set of socio-economic beliefs that play an accelerating role in achieving economic goals.

The required economic beliefs derived from the cultural context of society such as fundamental attitudes about the economic categories of money, profit, interest, capital and so on are among the basic requirements of activity in the capital market and their implementation will pave the way for the formation of the proper shareholder culture.

Elevating capital market’s share in national economy

Taking all the above-mentioned issues, the promotion of shareholder culture in the capital market by the related organizations (Securities and Exchange Organization (SEO) as the major one), and drawing citizens' attention to the fact that investing in the stock sector is one of the techniques of business development and increasing income, will increase the capital market share in the national economy.

The study of the successful trend of sustainable economic development in general and the capital market in particular in some countries in recent years, which occurred under the direct influence of cultural elements, shows the importance and place of culture in creating economic development and more generally in the sustainable development process.

 Social justice, public welfare

The capital market is one of the most important pillars of the economy, which is also called the thermometer of the economy. This market is much wider than the monetary market and has a greater variety of instruments.

If with the promotion of shareholder culture, investment in the capital market increases, national production will flourish, and if national production increases in a country, economic development will take place in that country. The results of economic growth and development are increasing the wealth of the people, developing the public welfare, poverty alleviation, and job creation.

These factors are in the direction of social justice and the implementation of welfare programs and protection of citizens against economic and social crises, income security and hope for the future for each individual, especially vulnerable groups.

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