The Analysis Survey of Market Makers’ Affect on Tehran Stock Exchange (2004 – 2006)
Subject Areas : Financial Knowledge of Securities Analysis
Keywords:
Abstract :
Empirical studies and theoretical principals make obvious that financialdevelopment and economic growth are interdependent. For developingcapital market we must introduce appropriate instruments, prepare a suitableinvestment environment, and reduce market risks. A main risk in capitalmarket is liquidity risk.Financial instruments and intermediaries, as a key part of advanced markets,have a considerable affect on market risk. Market makers are mostimportant financial intermediary. They increase liquidity of financialsecurities by precise evaluation of market, and securities sell/buy. Marketmakers have started their activities on Tehran Stock Exchange since 2004.With regard to importance of market makers presence in TSE, this researchbesides of exploring of market making in other exchanges, describe variousmarket making systems, comparable survey of rules and regulations onother exchanges and market making on TSE too. The Affects of marketmakers on TSE are examined with regarded to the market makingregulation. For this propose, price trend and liquidity from 2004 to 2006, for16 firms with the method of Vector Auto Regressive (VAR) studied. Thisresearch demonstrates that market making increased liquidity in market andeffected on price trend.