TalkMarkets Topics – Major Stock Exchanges Of The World
What are the major stock exchanges of the world?
Today there are more than sixty major stock exchanges around the world. Sixteen of these exchanges have market capitalizations of over 1 trillion dollars. These exchanges are sometimes referred to as the “Trillion Dollar Club”. Together they account for more than 80% of worldwide market capitalization.
Stock exchanges are markets where traders (and investors) engage in the buying and selling of shares, bonds, options, futures and other securities. Stock exchanges, like other financial markets are key indicators of a region or country’s economic health. Thriving stock exchanges serve as a measure of the health of the economy, and are key indicators of regional and global economic activity and growth.
When was the first stock exchange established?
The first stock exchange was established in Amsterdam in 1602 to allow the public to trade in the shares of the Dutch East India Company or Vereenigde Oost-Indische Compagnie. This was the first time shares were issued to the public in what was ostensibly the world’s first IPO or “initial public offering”. The company was eventually dissolved in 1800, but if it traded today its ticker symbol would be VOC or perhaps DEIC.
What are the 10 largest stock exchanges?
1. NYSE – The New York Stock Exchange
The New York Stock Exchange (NYSE) is located on Wall Street in New York City. It was established in 1817, but wasn’t known as the NYSE until 1963. It is commonly referred to by its nickname “The Big Board”. The New York Stock Exchange has survived a number of catastrophic events like the Wall Street Crash of 1929, Black Tuesday in 1987 and the Corona (virus) Crash of 2020. Since the end of World War I it has been the largest stock exchange (prior to that the largest exchange was the London Stock Exchange) with a market capitalization of $28.5 trillion as of June 30, 2018, the last date noted on the exchange’s website. This is an amount akin to something like 40% of stock market value worldwide. There are over 2400 companies trading on the NYSE. In November 2019 the top five companies on the NYSE in by market capitalization were: 1) Berkshire Hathaway (BRK-A), 2) Alibaba (BABA), 3) JP Morgan (JPM), 4) VISA (V), and 5) Johnson and Johnson (JNJ).
2. NASDAQ
The NASDAQ Stock Market was established in 1971 in New York City. Since then it has become the second largest stock exchange in the world. The NASDAQ is regarded as the center for technology companies due to the presence of the world’s biggest technology companies. At the start of 2020 the top 5 companies listed on the NASDAQ were 1) Microsoft (MSFT), 2) Apple (AAPL), 3) Amazon (AMZN), 4) Alphabet (GOOGL), and 5) Facebook (FB). In February 2020 the NASDAQ stock exchange had a market capitalization of $14 trillion.
3. Tokyo Stock Exchange (The Japan Exchange Group)
The Tokyo Stock Exchange was founded in 1878 and is the largest stock exchange in Japan. The exchange was closed during World War II. The exchange reopened in 1949 and during the 1980’s rose to become the largest exchange in the world falling to No.4 in the 1990’s before regaining the No.3 spot which it currently holds. In 2013 the Tokyo Stock Exchange merged with the Osaka Exchange forming the Japan Exchange Group. In February 2019 the market capitalization of the Tokyo Stock Exchange was $5.7 trillion. At the end of March 2020 the top 5 companies listed on the exchange were: 1) Toyota Motor Corporation (TM), 2) NTT Docomo (NTDMF), 3) Keyence Corp. (KYCCF), 4) Sony Corp. (SNE) and 5) Softbank Group (SFTBF).
Though the history of the Shanghai Stock Exchange dates back to 1891 it came into existence in its current form in November 1990 as The People’s Republic of China continued to increase its ties to the global economy. Today it is the largest stock exchange in China with a market cap of over $3.9 trillion and with more than 1,500 companies listed at the end of 2019. Five of the largest companies on the SSE are: 1) PetroChina (PTR, 2) Industrial and Commercial Bank of China, 3) Agricultural Bank of China (ACGBF), 4) Bank of China (BACHY) and 5) China Life Insurance Co. (LFC)
5. Euronext
Euronext N.V. (European New Exchange Technology) is a European stock exchange, registered in Amsterdam and headquartered in the La Défense section of Paris. The Euronext exchange operates stock markets in Amsterdam, Brussels, London, Lisbon, Dublin, Oslo and Paris. There are about 1,500 listed companies on Euronext exchanges. Market capitalization as of December 2019 was €4.5 trillion euros or $4.9 trillion. The Euronext Exchange is the heir to the original Amsterdam Stock exchange which began in 1602. The five largest European companies on the Euronext are: 1) Royal Dutch Shell (RDS-A), 2) LVMH (LVMHF), 3) L’Oreal (LRLCY), 4) Unilever (UL) and 5) HSBC (HSBC).
Securities trading in Hong Kong dates back to the mid-19th century, though the first formal market, the Stockbrokers' Association of Hong Kong, was not established until 1891. The Association was re-named the Hong Kong Stock Exchange in 1914. A second exchange, the Hong Kong Stockbrokers' Association was incorporated in 1921. After World War II, in 1947 these two exchanges merged to form the Hong Kong Stock Exchange and re-establish the stock market in Hong Kong. Rapid growth of the Hong Kong economy led to the establishment of three other exchanges - the Far East Exchange in 1969, the Kam Ngan Stock Exchange in 1971, and the Kowloon Stock Exchange in 1972. These four exchanges merged into to one exchange in 1986.
At the end February 2020 the total market capitalization of the Hong Kong Stock Exchange was $4.67 trillion. Many of the stocks traded on the Hong Kong exchange are based in mainland China. Five of the largest Chinese firms trading on the exchange are: 1) Sun Hung Kai Properties (SUHJF), 2) Hang Seng Bank (HSNGF), 3) Tencent Holdings Ltd (TCEHY), 4) CITIC Bank (CHBJF) and 5) BOC Hong Kong (BNKHF).
The London Stock Exchange is one of the oldest stock exchanges in the world (with early roots dating back to 1571) and began trading under its current name in 1698. The London Stock Exchange is located in Paternoster Square close to St Paul's Cathedral in the City of London. Today it operates under the auspices of the London Stock Exchange Group with more than 3,000 listed companies. Its’ AIM exchange founded in 1995 is one of the world’s busiest markets for new emerging technology companies. At the end of January 2020 the total market cap of the LSE was $4.54 trillion. The five largest companies listed on the London Stock Exchange by market capitalization are 1) Royal Dutch Shell (RDS-A), 2) Unilever (UL), 3) Hong Kong Shanghai Bank Corp (HSBC), 4) Astra Zeneca (AZNCF) and 5) British Petroleum (BP).
The Shenzhen Stock Exchange was founded in 1990 after Premier Deng Xiaoping declared Shenzhen as a special economic zone. It is one of two stock exchanges located in mainland China, the second being the Shanghai stock exchange. Shenzhen is one of the major hubs of technological innovation in China with many established hi-tech companies and start-ups. There are more than 2,000 listed companies on the Shenzhen Stock Exchange. Shares are traded in Yuan. The Shenzhen Stock Exchange had a market capitalization at the end of December 2019 of $3.59 trillion. The five largest companies by market capitalization at the end of 2019 were 1) Wuliangye Yibin, 2) Midea Group, 3) GREE Electric Appliance, 4) HIK Vision Digital Technology and 5) Ping An Bank. Presently, none of these stocks are traded on an OTC basis in New York.
9. TMX Group (Toronto Stock Exchange)
The Toronto Stock Exchange was initiated in July 1852, by a group of Toronto businessmen who met with the intention of forming an association of brokers. The exchange itself was officially created in October 1861, at the Masonic Hall in Toronto. At its’ onset there were 18 securities, (mainly related to banks and real estate) listed and trading was limited to daily half-hour sessions with only a small number of transactions being recorded. The Toronto Stock Exchange was incorporated by an act of the Ontario Legislature in 1878 and today is one of the largest stock markets in the world. The exchange is one of the most active markets for mining and energy stocks and as of 2019 there were over 2,200 companies listed and the exchange had a market cap of $3.26 trillion. The top five listed companies on the TSE as of February 2020 are: 1) Royal Bank of Canada (RY), 2) Toronto Dominion Bank, 3) Enbridge (ENB), 4) Bank of Nova Scotia (BKSHF) and 5) Canadian National Railway Corp. (CNI)
The Bombay Stock Exchange was established in 1875 during the British Raj. It is the oldest stock Exchange in Asia. With over 5,800 companies listed (many of them very small) the Bombay Stock Exchange has the largest number of listed companies of any stock exchange today. The exchange is located on Dalal Street in Mumbai. At the beginning of 2020 the Bombay Stock Exchange had a market capitalization of over $2.2 trillion. The five largest listings on the exchange are 1) Reliance Industries (RLNIY), 2) TATA Consultancy Services Ltd (TTM), 3) Hindustan Unilever Ltd, 4) Housing Development Finance Corp Ltd and 5) Infosys Ltd. (INFY).
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