L'wats Stock Exchange

L′odh Stock Exchange

Type	Stock exchange
Location	Kien-k'ang, Themiclesia
Founded	1818
Currency	Auric catty
No. of listings	1,870
Market cap	$3,230,000,000,000 (2019)

L′odh Stock Exchange (Shinasthana: 兌判市, l′odh-spran-djê) is a stock exchange located in L′odh Commune, Kien-k'ang. By market capitalization, it is the largest stock exchange in Themiclesia and the seventh largest in the world.

History

Rise of stocks

The street that hosted the spran-djê, the unregulated market where contracts for delivery were traded in the 1600s

Merchants have pooled capital for various reasons and proportionally divided profits since antiquity, but the emergence of tradeable interests in business ventures is much later and possibly connected with the practice of hiring agents to conduct business on a patron's behalf. The division of such interests into shares occurred in the late 14th century, when undertakings requiring the support of multiple patrons became common. Some of these ventures are akin to commodity contracts today, where shares ultimate convert into a portion of goods that the venture produces. Not all interests were proportional: some were coupons that granted the buyer a fixed amount of commodities or profits, regardless of the total produced or earned. This latter type is similar to a bond in modern practice. Most agree that these interests were not the same as a modern share, as the share, though tradeable, is meant to be redeemed when the business venture ends.

Early securities in Themiclesia is associated with so-called "perpetual" ventures, exemplified by colonial projects and the extraction of natural resources under license. Shares in such ventures could not be redeemed in the ordinary sense, as the venture itself lasted as long as profits remained expectant. Instead, shareholders expected a part of profits from the venture. Many such ventures were controlled by very few patrons, typically aristocrats, and shares could remain in the same hands for decades or even generations. In the 1500s, veterans of the Colonial Army, promised agricultural land in exchange for service, often turned into assets to colonial ventures. At the same time, broader ventures also appeared: patrons in the 17th century have hired trading parties who had latitude to buy and sell in multiple markets depending on evaluation. Many investors were duped by traders who pocketed moneys and attributed it to piracy.

The term spran-djê (判市) appeared in 1699 and referred to the practice of engraving two copies of a contract of delivery on a single plank and then splitting it down the middle, where the irregular section served to authenticate the document at the moment of delivery. The spran-djê was first located in the port city of Ning and was a place where goods from overseas were delivered by traders to purchasers or their agents, but the market was originally dedicated to the sale of goods, rather than securities. While shares in terminable ventures could be traded, this was the exception rather than the norm and usually occurred when a shareholder was short on cash or found out that the venture would be unfavourable. Shares in colonial and mineral stocks were more often traded, and their desirability depended on the survivability and profitability of the operation. The values of these shares were extremely volatile: a simple rumour that a colony had revolted or that a promised silver mine did not exist could make its shares worthless instantly, and vice versa.

The trading of interests in business ventures was not always protected or recognized by law in Themiclesia. Between 1589 and 1598, the Emperor unilaterally declared that contracts of delivery had no legal value, and debts with him must be settled by money. Yet the allure of incredible profits made abroad made the devaluation of shares by fiat impossible. The spran-djê was located on a mile-long street in Ning, two blocks from the docks.

In 1710, the spran-djê was described as a lunatic asylum as contracts of delivery fluctuated rapidly depending on views of the desirability of the contents to be delivered. This terminology probably reflected the growth of the selling of contracts for goods. For example, a contract for Sieuxerrian wine depended on whether the shipment would ultimately appear, the domestic fashionableness of that wine, and the price of competing liquors at home, amongst other factors. If the holder of the contract had little confidence in the shipment's value at market, he could sell the contract to a merchant expecting the opposite or had found a buyer who promised to pay a higher price. The contract could be resold an indefinite amount of times, though at some point the delivery must either take place or be considered lost. This is not a futures contract in the modern sense, as the goods are infungible, though it too permits speculation without or before taking delivery.

The introduction of modern shares was hinged on the appearance of businesses that were long-standing in which investors without any familiarity with its operations could expect to profit. This did not occur in Themiclesia until 1723, when a monopoly for the export of silks, the Textile Trading House (帛商), was established by the government to increase taxable revenue in this specific market. This evolution was probably an imitation of Batavian practices that attracted more working capital than previous Themiclesian methods permitted.

1900s

The stock exchange experienced general growth in the first two decades of the 20th century.

The performance of the stock market was heavily influenced by political issues in the 1930s. While the Nationalist Revolt of 1932 had very little influence on the market, the declaration of war on Themiclesia by Menghe in 1933 caused a panic in the market that lasted two weeks, only ending when the Government declared that it sought peace. The invasion of Themiclesia in 1934 caused the market to lose 10% of its value on Feb. 4, 1934. The fortunes of the market between 1933 and 1936 was tied to the Government's ability to project promise for peace or results in battle that suggested the Menghean forces might be checked before they created a serious impact on commercial activity.

On Jan. 2, 1936, the Conservative government announced that "peace was no longer a plausible expectation" and dissolved Parliament for a general election, which then paved the way for a National Unity Government and conscription. On the following trading day, the market lost 24.5% of its value, and this figure remains the largest single-day loss of all time in Themiclesia.

First stock exchange

Second stock exchange, c. 1870

Trivia

• Commissions in the Themiclesian Marine Corps became part of mutual funds in the 1920s and was (indirectly) traded in L′odh. They were considered a highly exotic instrument that had no stable market but extreme gains under the right circumstances. As war was declared in 1936, fund managers dropped commissions from portfolios, ironically allowing the Government to purchase them at dirt-cheap and give them to new cadets. After the war, Charles Kram reflected that buying and selling commissions was an inherently risky proposition that depended on an extremely limited supply and the presence of rich and desperate buyers. He said, "The question was how much a rich person would pay for a badge and seat at the dinner party, and that depends entirely on who that person is and what he wants to accomplish by gaining this access. And you got to price it accordingly. In this sense, you could say it was not traded on the open market. When war was declared, and especially when the War Secretary ordered all commission-holders to appear, they dumped them like clockwork. A bunch of us were actually pretty cross when it turns out the Exchequer bought them on the low."

See also

• Themiclesia