The largest stock exchanges in the world account for the majority of financial flows and international transactions. Certain markets dictate the pace of global finance, as well as acting as economic beacons for their host countries. Read on to discover our top 10 selection of the major stock exchanges worldwide.
Today, there are 60 major stock exchanges in the world. That is to say several dozen market places where stocks, bonds or securities are bought – or – sold. They differ in size and influence (reach). They also differ in terms of their market capitalisation and the volume of transactions that take place.
Stock exchanges were originally physical buildings located in their country of operation, but with the transition to electronic trading, many have had to close their trading facilities and switch to online platforms. The institutions themselves, however, still exist. They constitute, and are used to assess, the economic health of a country. In short, they are indicators of global economic power.
At this point, it is important to note that stock exchanges are traditionally ranked according to their capitalisation. Although this is an important factor, it is not the only one taken into account. Other criteria, such as listed companies, current events and the influence of these markets are also taken into account.
10. The Frankfurt Stock Exchange
The Frankfurt Stock Exchange (or FWB) was founded in 1585. Its initial purpose was to create a single currency rate and fix exchange rates. Over the centuries that followed, it took centre stage in international finance, as did the London Stock Exchange and the Paris Stock Exchange. It was not until after the Second World War that the institution officially became the first German stock exchange.
The capitalisation of the Frankfurt Stock Exchange was valued at 2 trillion USD in March 2018, making it the tenth largest stock exchange in the world. The companies listed are mainly based in Germany and other countries whose national currency is the euro. The main index used to assess its prices is the DAX, a leading stock market index of the top 30 FWB companies, which includes Adidas, BMW and E.ON (energy sector).
9. The Toronto Stock Exchange (TSX)
The Toronto Stock Exchange is the third largest stock exchange in North America after the New York Stock Exchange and the Nasdaq. It is obviously ranked first in Canada. It is home to more than 1,500 listed companies, most of which are Canadian companies.
In March 2018, its capitalisation stood at $2,290 billion. Among its largest registered members are the Royal Bank of Canada and Suncor Energy Inc (a major oil company). Its index, S&P/TSX, represents about 70% of its capitalisation.
For the record, it was founded in 1852. In 2009, 157 years later, the TSX merged with the Montreal Exchange and was renamed the TMX Group. In 2011, the new financial group was planning to merge with the London Stock Exchange in a bid to expand. However, not enough shareholders finally approved the project, forcing the TMX group to cancel the project.
8. The Shenzhen Stock Exchange (SZSE)
The Shenzhen Stock Exchange (or SZSE) is the first of the three Chinese stock exchanges that we will discuss in this ranking. In terms of importance, it is the third largest stock exchange in the People’s Republic of China. Founded in 1987, it was only officially operational in 1990, as were its rivals. The SZSE is self-regulated, but is supervised by the China Securities Regulatory Commission (CSRC).
Chinese yuan shares are traded on the SZSE because the companies listed on the SZSE are mainly based in China. As of March 2018, the Shenzhen Stock Exchange had a combined market capitalisation of $3.49 trillion, making it the eighth largest stock exchange in the world.
It is of course seeking to develop and diversify. For example, this stock exchange is home to the SME Council, created in 2004 for companies in the manufacturing sector. We should also mention the ChiNext Council, introduced in 2009 with the aim of developing technology start-ups, strongly inspired by the American Nasdaq.
7. The Hong Kong Stock Exchange (HKSE)
Outranked by Tokyo and the ambitious Shanghai, the Hong Kong Stock Exchange (which has existed since 1891) is ranked third in the entire Asian market. This second largest market in China is currently home to more than 2,000 companies, including both Chinese and foreign firms.
However, we must give credit where credit is due. The Hong Kong Stock Exchange is the fifth largest stock exchange in the world in terms of market capitalisation: estimated at $4.46 trillion in March 2018. It is ahead of its rival Shanghai in this respect, but is growing at a slower pace than the latter.
It trades in Hong Kong dollars (HKD), as the companies listed on it are mainly based in Hong Kong. No fewer than 1,955 companies are listed on the exchange. Most of them are based in the city itself, which is why trading is done in Hong Kong dollars (HKD). Most of this market capitalisation comes from its top 20 stocks, which include AIA (insurance company), Tencent Holdings (coveted by Shanghai) and HSBC Holdings.
6. The Euronext Stock Exchange
Since its creation in the 2000s, the Euronext Stock Exchange has gradually become the main stock exchange in the euro area. Also known as Euronext N.V., it is a pan-European stock exchange group that operates markets in Belgium, France, Ireland, the Netherlands, Norway, Portugal, the UK and Italy.
Although only 20 years old, this rather unusual stock exchange is now the leading equity market in Europe. It is the continental leader in listing and trading, with 1,800 listed companies and a market capitalisation of almost EUR 4,500 billion. Daily volumes are between 11 and 12 billion euros, for more than 630,000 contracts. Not to mention that it is the largest pool of liquidity in Europe. Its clientele is both national and international.
It should be noted that on 12 October last year, Euronext bought the Milan Stock Exchange for 4.3 billion euros (previously held by the London Stock Exchange). Thanks to this transaction, the operator has secured its place at the top of the Old Continent’s equity markets for a certain length of time. It has outsmarted powerful competitors such as Deutsche Börse and the Swiss Six Group.
5. The Shanghai Stock Exchange (SSE)
Like the imposing city in which it is based, the Shanghai Stock Exchange has undergone extremely rapid development and growth. In 2012, the Shanghai Stock Exchange became the largest stock exchange in China. Ahead of those of Hong Kong or Shenzhen and the sixth largest in the world in terms of capitalisation. This amounts to nearly 4,000 billion euros. In just 10 years, this stock exchange has quadrupled the capitalisation of its listed securities. This is unprecedented in the world of finance and illustrates the unprecedented economic development of China since the end of the 20th century.
In the first quarter of 2020, and for the first time in 4 years, China overtook the United States in the IPO market (both in terms of the number of deals and the amounts raised). Nearly 80 companies made their debut on the Shanghai, Shenzhen and Hong Kong stock exchanges, raising nearly $12 billion. In Shanghai and Shenzhen, 52 companies (more than half) raised $11.8 billion. On Wall Street, only 24 companies made their debut and raised $7.3 billion.
The SSE has high ambitions. With the support of the Chinese government, it launched a new market in July 2019 for technology stocks called the Star Market. It was then nicknamed the “Chinese Nasdaq”. The objective to challenge the New York finance was clear. Right from the first day, this new financial market experienced a meteoric rise: + 520%. One year later, it is still enjoying a growth rate of around 50%, while the Nasdaq is only up by 24%.
4. The Tokyo Stock Exchange (TSE)
A symbol of Japan’s economic power, the Tokyo Stock Exchange, also known as the Tokyo Shoken Torihikijo in Japanese, is the most important stock exchange in Asia. With 2,410 listed stocks and 3,575 companies, it is considered the third largest stock exchange in the world, just behind Nasdaq and the NYSE. Currently, it is responsible for the listing of more than 2,000 companies that are fully dedicated to ICT and electronics.
As of March 2020, the market capitalisation of the institution’s securities stood at $5,100 billion (€4,360 billion). About 3 trillion yen (EUR 24.2 billion) of securities are traded on average every day.
3. The London Stock Exchange (LSE)
The oldest stock exchange in the world, founded in 1776, the London Stock Exchange (or LSE) is today the third largest international stock exchange and the only European stock exchange in the top five. It easily rivals the first two in terms of prestige and international influence. It is currently home to over 3,000 companies in 70 countries.
We often forget that this financial centre was the most important stock exchange in the world before being dethroned by New York after the First World War.
Not surprisingly, the London Stock Exchange is the most powerful in Europe. It almost made a big splash in 2011 by merging with its Canadian counterpart, the Toronto Stock Exchange, although this deal fell through at the last moment. Despite its age, the British stock exchange has not abandoned the idea of expanding. The LSE offers shares in thousands of American, British and European companies and has a market capitalisation of over 6 trillion. By buying the Milan Stock Exchange in 2007, it also consolidated its leadership, even though it no longer owns it today.
Traders can track its performance and market capitalisation through the Financial Times Stock Exchange Index 100 Share Index, better known as the FTSE 100. This index comprises the top 100 companies listed on it, including Barclays, BP and GlaxoSmithKline.
2. The NASDAQ
The Nasdaq has existed since 1971. It is one of the largest equity markets in the United States by volume traded. It lists more than 5,000 companies that are considered to have strong potential for economic growth. They are in the high technology, internet, telecom, industrial and even biopharmaceutical and biotechnology sectors.
The institution owes its reputation and influence to its strong innovation. It was quite simply the first electronic stock exchange to open in the world. Today it is entirely run by a network of computers. A remarkable feat at the time, which gave it some major advantages over other global exchanges. Today it is the largest electronic stock market in the world, with over 900 transactions per second. The Nasdaq’s market capitalisation reached $10 trillion in March 2018, making it the second largest exchange.
At the centre of this body of high-potential technology companies is a very unique group: the Nasdaq 100. This stock market index corresponds to the 100 largest non-financial companies listed on this market. The top six places are contested by Apple, Microsoft, Amazon, Facebook, Alphabet and Intel. Other high-profile companies currently listed on the index include Tesla and Netflix. This is the ultimate proof of the size of this stock market, which proudly sits in Times Square.
1. The New York Stock Exchange (NYSE)
The New York Stock Exchange, often nicknamed “The Big Board”, is currently considered to be the most important stock exchange worldwide. This stock exchange is the most prestigious in the world, so much so that the uninitiated often refer to it as Wall Street, even though this name simply refers to the district where it is located in Manhattan. It has become the emblem of American finance.
And not without good reason as its share volume represents the largest market in the United States. The total market capitalisation of the companies listed on it far exceeds that of the Nasdaq: $30 trillion in 2019, or ten times the size of the Paris stock exchange. In short, this amount represents more than 40% of the total world stock market value. Today, the institution lists the shares of more than 2 000 companies. All of them have an individual capitalisation of more than 10 billion dollars.
The NYSE also has a global reach through its flagship index, the Dow Jones. It is the oldest stock market index in the world (created in 1886). Today, it includes 30 major companies (such as Apple, Nike and Walt Disney).
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