This post covers a glimpse of the Top 10 Largest Stock Exchanges in the World. Gather some exciting and interesting information about a set of leading stock exchanges across the globe.
What is Stock Exchange? Meaning & Functions
A market is the place to buy and sell. Similarly, Stock Exchange is nothing but a centralized market for buying and selling financial instruments like shares, bonds, debentures, and derivatives.
Even before the 1500s people used to meet to exchange promissory notes and bonds, but the first stock exchange was established in 1602 in Amsterdam, the “Amsterdam Stock Exchange”. This was incorporated by the Dutch East India Company to trade their first issued shares and bonds. Ever-Since the stock exchanges have provided a platform for investors and companies to join forces and work towards one combined goals “Profits”.
Functions of Stock Exchange:
- A stock exchange allows buying and selling of securities
- Stabilizes and standardizes investments
- Companies can raise fund by listing their securities
- Investors and traders have a convenient place to trade securities
- Facilitates fund transfer between individuals and companies
- A regulated market place safeguarding the interest of different parties
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Largest Stock Exchanges in the World: Top 10
Let me take you through the top 10 Stock Exchange platforms. (Please note the date and value figures as based on market cap data extracted as on March 2020)
1. New York Stock Exchange (NYSE)
This was established in 1792 which officially became New York Stock & Exchange Board in 1817 and ever since has been growing tremendously and is now an inter-continental market for all traders and companies. This is ranked as the biggest stock exchange in the world.
New York Stock Exchange: Key Facts
- With 2,400 listed companies and market capitalization of 25.53 trillion U.S. Dollars, it’s the world’s largest and most powerful stock exchange in the world.
- As per the latest statistics, approximately 40% of the world’s stock market capitalization is parked in NYSE.
- Trading normally takes either electronically or through the traditional floor method.
- The business hours of operations are from 9.30 am to 4 pm (EST) and are closed on all American national holidays.
- Dow Jones is the best-preferred index for the evaluation stock position.
2. National Association of Securities Dealers Automated Quotations (NASDAQ)
National Association of Securities Dealers Automated Quotations or NASDAQ was formed by a group of stockbrokers in 1971.
NASDAQ: Key Facts
- The platform, when introduced, was stated as ahead of time as it never supported only electronic mode alone and no other way of trading since the beginning
- Currently, considering its market capitalization value of 11.23 trillion USD, the platforms rank second globally.
- With companies like Apple, Tesla, Facebook, Amazon listed onto the forum, it has gained heavy popularity.
- NASDAQ100 is the most common index used to evaluate the performance of financial instruments.
3. Tokyo Stock Exchange (TSE)
The Tokyo Stock Exchange (TSE) was established in 1878. Owing to the Second World War the platform was discontinued between 1945 to 1949 and had resumed its operation in late 1949.
Tokyo Stock Exchange (TSE): Key Facts
- JSE was formed after the merger in between the Osaka Securities Stock Exchange and the TSE in 2013 and is now the largest stock exchange forum in Japan.
- With 3,575 companies listed and total market capitalization value ranging to $5.1 trillion USD, this is ranked as third in the best stock exchanges listing.
- Nikkei 225 is the benchmark index to check the values of financial instruments traded.
4. Shanghai Stock Exchange (SSE)
It is one of the independent stock exchanges in China. The same was formed in 1866 but was closed down during the Chinese revolution of 1949 and was re-established as of 1990.
Shanghai Stock Exchange: Key Facts
- It’s a non-profit organization.
- With 1000+ listed companies the total market value ranges up to 4.67 trillion USD and is the fourth largest stock exchange platform.
It has a unique way of share listing and trading. The shares are listed in 2 categories:
- “A” shares that are priced in the local yuan currency. These are open to domestic investors only i.e. for any foreign investments special permission is required and
- “B” shares are quoted in US dollars. These shares are offered to both domestic and foreign investors.
5. Hong Kong Stock Exchange
It was founded in 1891 with the collaboration of stockbrokers in Hong Kong.
Hong Kong Stock Exchange: Key Facts
- With the total market valuation ranges to 4.23 trillion USD, it is the third-largest Stock Exchange in Asia and fifth position when ranked globally.
- The total number of companies listed is about 1955.
- The platform has recently shifted from physical trading to electronic trading modes in 2017.
Also read: Stocks vs Shares: Know the Difference
It was established in 2000 to encompass the economic development of European countries.
Euronext Stock Exchange: Key Facts
- This Stock exchange operated in EURO.
- It is a PAN-European stock exchange with a presence in France, Belgium, Ireland, and Portugal with its headquarters situated in Amsterdam.
- With 1300 listed company and market cap at 3.67 trillion USD that makes it it rank sixth in the largest stock exchanges list.
- Euronext 100 is the most common index used to evaluate the performance of financial instruments.
7. Shenzhen Stock Exchange
It was founded in 1987 but it started its function in 1990.
Shenzen Stock Exchange: Key Facts
- With a the total market value of 3.28 trillion USD, it stands at the seventh position in the counting.
- It is an independent organization operating in China but needs to compliant for all regulation listed under China Securities Regulatory Commission (CSRC).
- As the major companies listed are Chinese, thus the trading takes place in Chinese “yuan”.
8. London Stock Exchange (LSE)
It is the oldest stock exchanged and was established in 1698. It was the largest platform across nations until the end of World War I.
London Stock Exchange: Key Facts
- With 3000 companies across 70 countries spread listed and market value which stands at 2.92 trillion USD, it is now ranked as the eighth largest stock exchange platform globally and the largest in Europe.
- FTSE 250, the FTSE Small Cap and the FTSE All-Share are common evaluation index used.
9. Toronto Stock Exchange (TMX)
It’s the largest stock exchange in Canada and was founded back in 1852.
Toronto Stock Exchange: Key Facts
- TSX merged with the Montreal Stock Exchange in 2009 and renamed from TSX Group to TMX since then.
- With total 2,207 companies listed and market capital value of 1.75 trillion USD, it is positioned as 9th place globally.
10. Bombay Stock Exchange
It was the first stock exchange in Asia, established in 1875.
Bombay Stock Exchange: Key Facts
- It has the highest number of companies listed with 5,749 in total.
- With the market capital value of 1.51 trillion USD, it is stationed at the tenth position in the global ranking.
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Today, there are in all 25+ Stock exchanges established across the world to enable and help the traders to invest in the market. Each Stock exchange works on their own rule book and policies but the general focus area remains common i.e. enabling a seamless and easy platform for all investors and companies to come together and work towards each other’s benefits.
This was about the most popular and the Biggest Stock Exchanges in the World. Do you wish to share your valuable thoughts on any of the stock exchanges and their functions, feel free to do so in the comments.