Most of us always have a query about stock market. It will be: What is the need of issuing the shares for a company? Let us assume that you are running a jewelry shop in a metropolitan city. You have been running the business successfully for 10 years and now you do wish to expand the same to other cities in the country. Say you may need another 100 thousand dollars to realize your dream. But you don’t possess that much capital. Then you have to either borrow that money from lenders or convince your known ones to join as partners. In both these cases, there is a higher probability of ruining your business or organization. Instead of convincing 10 people to invest 10 thousand dollars per person, you can invite 1000 people to invest 100 dollars per person. In this case, risk involved for the entrepreneur will be very low.
To regulate these issues, stock exchanges were formed. Were stock exchanges devised just recently? Definitely NO. In the 11th century, in the city of Cairo (currently the capital of Egypt), Yuthas and Mughals were involved in the buying-selling trade and this is the Rishi Moolah for all the stock exchanges of the world. As per the record, the first stock exchange of the world was “Amsterdam Stock Exchange” formed in the year of 1602 by the Dutch East India Company. Then this concept spread to all the countries gradually and stock exchanges were formed throughout the world by the Traders organization.
The ranking of stock exchanges could be based on various factors such as number of companies listed in the market, market capitalization and turn over at the end of year. Here I have used market capitalization factor and listed the top 10 stock exchanges in the world. They are:
10. Bombay Stock Exchange:
This is one of the oldest stock exchanges in the world. It was formed in the year of 1850. Till 1874, the trading took place under the banyan tree on Mahatma Gandhi road, Mumbai. Then it was shifted to the Dalal Street (Broker’s street). This stock exchange has the largest number of companies listed all over the world. More than 4900 companies are listed in the Bombay Stock Exchange. Till 2002, it was known as The Stock Exchange, Bombay. Then it was renamed as BSE. Apart from BSE, other important stock exchange of India is National Stock Exchange which was formed in the year of 1994. Recently BSE is published as a company in the stock exchange. Currently the market capitalization of BSE is 1,263 Billion dollars and the market operates between 9.15 am and 3.30 pm
9. Australian Securities Exchange:
The first stock market of Australia was formed in the year of 1861 at Melbourne. Then it underwent numerous changes throughout the 19th century. Finally Australian Securities Exchange was created in the year of 2006 by the merger of Australian Stock Exchange and Sydney Future Exchange. They do offer all products such as bonds, stocks, commodities and other premium stocks. The current market capitalization of Australian Securities Exchange is 1,386 Billion dollars and the market timings are 9.50 am and 4.12 pm.
8. Deutsche Borse Stock Exchange:
This is the stock exchange of Germany located at Frankfurt. This is one of the few stock exchanges which involves in charity organizations. It has nearly 765 companies listed in the market. Reto Farcioni serves as the CEO of this exchange. This was formed in the year of 1994. Various branches of this exchange are located at Luxemberg, Switzerland, Czech Republic and Spain. Currently the market capitalization of Deutsche Borse is 1,486 Billion Dollars and the market functions between 8.00 am and 10.00 pm.
7. Toronto Stock Exchange:
Toronto Stock Exchange is maintained by TMX group of Canada. It is located at Toronto, Canada. This is one of the largest stock exchanges in the world. This is the third largest stock exchange in North America. Various companies in Europe, Canada and United States are listed in this stock exchange. They are the leader in the mining and oil sector. The first stock exchange of Canada was formed in the year of 1852 by the Association of the Brokers of that country and later on they grew into the seventh largest stock exchange in the world. Presently 2,058 Billion dollars serves as the market capitalization of this stock exchange and the operational timings are between 9.30 am and 4.00 pm.
6. Shanghai Stock Exchange:
This is the third largest stock exchange in the Asian continent and second largest in the People Republic of China. Formed in the year of 1990 and these organizations are not entirely open to the foreign investors and there are strict regulations issued by China Securities Regulatory Commission. The index of Shanghai Stock Exchange has reached a maximum of 6,000 points during the year of 2007 and now it is floating nearer to the 2,500 mark. The market capitalization of SSE is 2,547 Billion dollars and the market functions between 9.30 am and 3.00 pm.
5. Hong Kong Stock Exchange:
During the year of 2011, this stock exchange stood at 6th position in terms of market capitalization. Now it has marched to number 5 position. There is no stringent controls on outside investors unlike Shanghai Stock Exchange. There are nearly 1,470 companies listed in this exchange. This is the largest stock exchange in China. Initially It was named Association of Brokers, Hong Kong in 1891 but later it was renamed as Hong Kong stock exchange in 1914. The market capitalization of Hong Kong Stock Exchange is 2,831 Billion dollars and functions between 9.15 am and 4.00 pm.
4. London Stock Exchange:
This is the oldest stock exchange in the world which was established in the year of 1801. This is the real international market in which nearly 3,000 companies from 70 different countries are listed. Among the European countries, this stock exchange has the highest market capital value. It is located near Paternoster square. The first stock exchange of United Kingdom could be traced to the early 16th century. Stock exchange went through numerous changes and recently in the year of 2011, it was announced publicly that London Stock Exchange had merged with TMX group. Currently the market capitalization of London Stock Exchange is 3396 Billion dollars and trading occurs between 8.00 am to 4.30 pm.
3. Tokyo Stock Exchange:
TSE is the third largest stock exchange all over the world and first largest stock exchange among the Asian countries. It was created in the year of 1878. Now more than 2,000 companies are listed in Tokyo Stock Exchange. When this stock exchange was introduced with new methods of transaction in the year of 2005, it was severely affected by bugs and shut down completely for four and half hours. This was the worst interruption in trading this stock exchange had to face. Now the market capitalization of this stock exchange stands at 3,300 Billion dollars and the market functions between 9.00 am and 3.00 pm.
2. NASDAQ Stock Exchange:
This stock exchange was constituted in the year of 1971. This is the second largest stock exchange in North America. NASDAQ stands for National Association of Securities Dealers Automated Quotations. This stock exchange is maintained by NASDAQ OMX group. They also maintain the same stock exchange in eight different European countries. This is headquartered at New York. The current market capitalization of NASDAQ is more than 4500 Billion dollars and the market functions between 9.30 am and 4.00pm. Including the pre market and post market sessions they would function between 7 am and 8 pm.
1.New York Stock Exchange:
This is located in the most famous Wall street, New York and it was established in the year of 1792. Unlike NASDAQ stock exchange the physical buying and selling of stocks are also available. Now mostly electronic transaction happens and this happens to be the world’s largest stock exchange. Large, medium and small cap companies are listed in the New York stock exchange. It was merged with American Stock Exchange in the year of 2008. The current market capitalization of NYSE is more than 14,000 Billion dollars and the market functions between 9.30 am to 4.00 pm. Also New York Stock exchange due to its enormity is subject to incessant terror threats.