History of Today's Sharemarket

The world’s sharemarkets have an interesting history. The first publicly issued security can be tracked back to the fourteenth century in Venice.

The governing body of Venice wanted to begin paying back debt to neighbouring countries which had been incurred.

After discovering that they were unable to do so, the government made the first known issue of bonds. These government securities were purchased by merchants and landowners as investments. Bonds are still issued today by governments primarily to service debt and also to encourage cash based investment.

In London in 1693 King William of England raised one million pounds from the public at a fixed interest rate of 10%. A year later the Bank of England was formed so the government could finance wars. Credit facilities were set up to encourage merchants to expand their business, and systems were put in place to enable merchants to raise public funds through the issue of an early type of share.

The largest public company at that time was the South Seas Company which was listed In 1711. Robert Harley took over the government debt of 9 million pounds in exchange fo...