By most estimates, approximately 630,000 companies are now traded publicly throughout the world. The growth of global stock markets outside of the United States and Europe is a key reason that the number of public firms continues to grow. The U.S. still has the largest exchange in the world, but many of the largest exchanges now reside in Asia, which continues to grow in influence on the world stage. Below is an overview of some of the largest exchanges in the world.
1. The New York Stock Exchange
The New York Stock Exchange (NYSE) is part of NYSE EURONEXT, which now has exchanges in the U.S. and Europe. It estimates that its exchanges represent a third of all equities traded in the world. The NYSE continues to be one of the primary exchanges in the world and the largest in terms of the nearly $10 trillion in stock market capitalization it represents.
The NYSE has been around since 1792 and it is believed that Bank of New York, which is now part of Bank of New York Mellon, was the first stock traded. The ringing of the NYSE bell at the start and end of the day is a common occurrence in today's media.
The business has grown incredibly competitive in recent years. In a recent filing with the Securities And Exchange Commission (SEC), the company notes that it must compete for the listings of cash equities, exchange traded funds, structure products, futures, options and other derivatives.
2. The Tokyo Stock Exchange
The Tokyo Stock Exchange (TSE) is the largest exchange in Japan and also number two behind the NYSE in terms of the more than $3 trillion in market capitalization the companies on its exchange represent. A stronger national currency is part of the reason behind the increasing size of the TSE. Around 2,000 firms are listed on the TSE.
The exchange was estimated to have first opened in 1878 and partners with other exchanges around the world, such as the London Stock Exchange below. The Nikkei 225 index is one of the primary and most popular indexes that represent some of the largest and most successful firms in Japan.
3. The London Stock Exchange
The London Stock Exchange (LSE) qualifies as a top-five stock market, with an estimated $2.2 trillion in stock market capitalization from the companies listed on its exchange. Its estimated founding was 1801, or nearly a decade following the opening of the NYSE.
The LSE considers itself the most international of global exchanges, based on the fact that around 3,000 companies from around the world trade on the LSE and its affiliated exchanges.
4. The Hong Kong Stock Exchange
The Hong Kong Stock Exchange is one of the top 10 largest stock exchanges. The firms that are listed on the Hong Kong Stock Exchange represent close to $2 trillion in total market capitalization. Roughly 1,500 companies are listed on the exchange, which dates back to just prior to 1900, when it first started operating. Most importantly, the exchange represents one of the primary avenues for global investors to invest in China.
5. The Shanghai Stock Exchange
The Shanghai Stock Exchange is one of the newest in the world. It opened in late 1990, and 1,500 companies trade on its exchange. Trading volume continues to increase but has fallen dramatically since 2008, which marked a peak in terms of investment interest in China.
A major restriction is that "A" shares of Chinese companies are only available to citizens living in China. Hong Kong has "H" shares that are open to global investors.
The Bottom Line
Exchanges that also deserve mention include the Nasdaq, which is also based in the U.S., the Bombay Stock Exchange in India, Sao Paulo Stock Exchange in Brazil, and the Australian Stock Exchange. These exchanges continue to grow in influence on the global stage.
The current global recession has slowed the progress of emerging markets, but they are expected to continue to gain market share in the coming decades as their economies grow and new firms go public and raise capital to serve a growing class of consumers, and continue to grow the worldwide network of exchanges.