Stock markets are marketplaces where new shares are issued and traded, so that business entities can fund their operations. Shareholders and companies benefit from presence of profitable stock markets in their country. US is one such country that enjoys the existence of high turnover and market capitalization stock exchanges.
The size of the United States stock markets is the testimony to the fact that the country has one of the most well developed capital markets in the world. The combined market capitalization of the New York Stock Exchange (NYSE) and NASDAQ in the United States, at a staggering $15 trillion, is greater than that of the next six biggest exchanges combined.
1. New York Stock Exchange
2. Tokyo Stock Exchange
3. NASDAQ
4. London Stock Exchange
5. Euronext
6. Shanghai Stock Exchange
7. Hong Kong Stock Exchange
8. Toronto Stock Exchange
9. BM&F Bovespa
10. Bombay Stock Exchange
Situated on Wall Street, the world’s largest stock exchange- New York Stock Exchange- has a market capitalization that exceeds $11.9 trillion as of August 2010. As of December 2009, the exchange’s volume was estimated to be around $17.5 trillion. On an average, the exchange conducts a daily trade of around $170 billion. Based on its listed securities, the New York Stock Exchange is considered to be the largest equities based exchange.
Started in 1792, this exchange was formerly a private firm, which became a public company when it merged with Arcipelago, an electronic trading exchange in 2005. Following a merger with Euronext, the New York Stock Exchange’s parent company came to be known as NYSE Euronext. Nicknamed as the Big Board, the exchange has consistently relied on its on-floor trading practice even after they upgraded to the electronic trading system.
With an estimated domestic market capitalization of $3,306 billion, the Tokyo Stock Exchange located in Tokyo, Japan is second to the New York Stock Exchange. This estimate is based on the aggregate market capitalization of Japan’s 2414 listed companies. Founded in 1878, the Tokyo Stock exchange is owned by the Tokyo Stock Exchange Group Inc. The exchange has a volume of approximately $3.7 trillion as of December 2009. In 2008, the Tokyo Stock Exchange joined with the London Stock Exchange to create a new Tokyo based joint venture.
NASDAQ is considered to be the world’s third largest stock exchange in terms of market capitalization. The exchange is considered to be the largest equity securities trading company in the United States of America. NASDAQ has a trading volume of 13.6 trillion. This figure suggests that this exchange has the largest trading volume when compared to other electronic stock exchanges in the world. Located in New York City, the NASDAQ has a market capitalization that is approximately $3.08 trillion.
The London Stock Exchange is located in the city of London, United Kingdom and is considered to be the fourth largest stock exchange in the world. This is on the basis of its market capitalization, which is approximately $2.63 trillion as of August 2010.
Based in Amsterdam, Euronext is a pan European stock exchange, which owns subsidiaries in Portugal, France, Belgium and Netherlands. The exchange predominantly deals with equities and derivatives. With an estimated market capitalization of $2.5 trillion as of August 2010, Euronext is considered to be the fifth largest stock exchange in the world. The current listing for the exchange runs close to 1,100. Having merged with the New York Stock Exchange Group in 2007, the parent company NYSE Euronext has become the first global stock exchange.
The Shanghai Stock Exchange is considered to be the sixth largest exchange in the world. This is based on its estimated market capitalization of $2.4 trillion as of August 2010. Owing to the strict capital account controls by the Chinese authorities, the exchange is not entirely open to investments from foreigners. Founded in 1891, the exchange closed in 1949 and was re-established in 1990. It currently has a listing of 880 trading entities.
The Hong Kong Stock Exchange was established in 1891 by the Hong Kong Exchanges and Clearing. The exchange currently enjoys a listing that approximates 1,300 investors. With an estimated market capitalization of $2.3 trillion as of August 2010, the exchange is considered to be the second largest stock exchange in Asia. The exchange’s first electronic trading system, known as the computer assisted trading system used from 1986 was replaced by the Automatic Order Matching and Execution System in 1993. The exchange has since then upgraded its trading practices to a third generation AMS system in 2000.
The largest stock exchange in Canada and also the third largest in North America is the Toronto Stock Exchange. This exchange has a listing of close to 3,700 companies and a market capitalization of $1.7 trillion as of August 2010. These figures indicate that the Toronto Stock Exchange is the eighth largest stock exchange in the world. The TMX Group owns and operates the exchange and it functions as the group’s subsidiary for trading senior equities. The exchange allows businesses from Canada, United States of America and a wide range of other companies to trade with the exchange. The exchange deals with conventional securities, investment funds, income trusts, split shares and investment traded funds.
The BM&F Bovespa exchange, located in Sao Paulo in Brazil is considered to be the ninth largest stock exchange in the world owing to its estimated market capitalization figures of $1.27 trillion as of August 2010. Established in 1890, the BM&F Bovespa is a stock exchange that has around 375 listings. The exchange is a result of the merger of the Sao Paulo Stock Exchange of Bovespa with the Brazilian Mercantile and Futures Exchange in 2008.
The Bombay Stock Exchange is the oldest stock exchange in Asia and has the most number of listed companies – a total figure of approximately 5,000. With a market capitalization of $1.7 trillion, the exchange is considered to be the tenth largest stock exchange in the world. Founded in 1875, the exchange predominantly uses the BSE Sensex indices for its trading purposes.
The stock exchanges on this Top 10 Stock Exchanges of the World list are some of the oldest and most widely recognized in the world. These exchanges not only enjoy the top rankings but also the investments and businesses that different companies and countries bring in.
