Welcome to Fintastic Females, where we embark on an exciting journey to explore the mythical island of financial freedom together. I’m Kalyani, and I have my co-host with me Rupali, your friendly neighborhood finance experts. Join us as we share our experiences and break down complex financial concepts in our trademark digestible way. We began by unraveling the concept of financial markets, likening them to physical markets or malls where buyers and sellers convene to exchange stocks or shares of publicly listed companies. Gone are the days of chaotic trading floors depicted in movies.

Most transactions now take place online, although the excitement and occasional volatility still persist. Moving on, we clarified the definition of a company as an institution or entity registered as a separate legal entity, much like an individual. We then dived into the fascinating world of Initial Public Offerings (IPOs), which have gained significant popularity in the UAE. An IPO occurs when a business owner seeks additional capital to expand their venture beyond personal funds or traditional bank loans. Going public through an IPO involves careful consideration of various factors, including the impact on the company’s financial statements and long-term strategic goals. We highlighted that IPOs offer an opportunity for companies to raise funds, but they only earn from the initial IPO itself. Subsequent trading and selling of shares benefit the shareholders, not the company directly.

We stressed the importance of fair valuations and due diligence during the IPO process, ensuring the company sets a reasonable share price and complies with regulations to maintain healthy competition in the economy. Drawing from real-world examples, such as Facebook (now Meta) and Tesla, we discussed how founders like Mark Zuckerberg and Elon Musk can retain majority control even after going public. This control allows them to influence decisions and maintain a long-term vision for their companies.

We also touched upon the impact of major shareholders liquidating their shares and its potential consequences on stock prices. Transitioning to the topic of stock prices, we emphasized that various factors drive them. Beyond fundamental aspects like company performance, management, and sector trends, sentiment plays a pivotal role in shaping stock prices. Mass psychology and herd behavior often influence market sentiment, leading to both predictable patterns and emotional fluctuations. News and media coverage significantly impact sentiment, as exaggerated reports can generate fear or panic among investors, resulting in stock selling and price declines.

We acknowledged that traditional finance assumptions about rationality and perfect self-control are not always accurate, as human nature and biases come into play. Anchoring bias and other behavioral aspects influence decision-making, making it challenging to forecast stock prices solely based on fundamentals. Understanding both the fundamentals and the pulse of market sentiment becomes crucial for comprehensive analysis. In conclusion, our journey into the world of finance and its terminology revealed the intricate interplay of financial markets, IPOs, stock prices, and investor sentiment.

By demystifying these concepts, we aim to empower our audience to make informed decisions and navigate the exciting realm of finance with confidence. Join us next time on Fantastic Females as we continue our exploration of finance and energy.