Stock exchanges bring companies and investors together, they enable companies to raise money through issuing equity shares to be sold to investors. But what are stock exchanges? Like any other market where you can buy and sell goods and services, a stock exchange is a marketplace where you can buy and sell stocks, bonds, securities, commodities, or other financial instruments. It is a place where buyers and sellers of securities come together to execute their transactions. There was a time when the stock market had traders on the floor who would take orders and execute them but with everything going digital, there are very few such markets. You can now easily find online marketplaces where you can buy and sell stocks, bonds or other securities with one click.
There are several stock exchanges in the world and they serve as a measure of the health of an economy. It also improves the economic strength of the world. The exchange will give membership to designated brokers who will act as an intermediary and carry out the buying and selling for an investor. It will also ensure compliance with fair trade practices.
Largest stock exchanges in the world
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New York Stock Exchange (NYSE), USA
The world’s largest stock exchange began as a literal stock market on Wall Street and has more than 2,400 companies listed today. The New York Stock Exchange was established in 1792 and is one of the oldest stock exchanges. It has an average trading volume between 2 to 6 billion shares and it can impact other stock market indices due to the high trading volumes.
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National Association of Securities Dealers Automated Quotations (NASDAQ), USA
NASDAQ is the second largest stock exchange in the world and is also located in New York. It was established in 1971 and is the first electronically traded stock exchange. It has over 3,000 companies listed. The exchange has the top technology companies that contribute significantly to the world and is highly inclined towards health care, technology and consumer services space.
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Shanghai Stock Exchange (SSE), China
The Shanghai stock exchange is the third-largest stock exchange in the world and also the largest in Asia. It has over 1,5000 public limited companies and the largest stocks on the exchange are Commercial Bank of China, PetroChina, and Agriculture Bank of China.
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European New Exchange Technology (EURONEXT), Europe
Located in Amsterdam, Euronext is a multi-state stock exchange and operates exchanges in London, Amsterdam, Lisbon, Dublin, Paris, Oslo, Brussels, and Milan. Established in 2000, it is also the best stock exchange in Europe with over 1,300 listed companies.
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Tokyo Stock Exchange (TSE), Japan
The Tokyo Stock Exchange is also known as Tosho and it is headquartered in Tokyo, Japan. Established in 1898, this stock exchange had to suspend operations for four years after World War II and it later resumed operations in 1949. It has over 3,500 companies listed and has two sections, one comprises large companies while the second one includes mid-cap companies.
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Hong Kong Stock Exchange (HKEX), Hong Kong
Established in 1891, the Hong Kong Stock Exchange is the third largest exchange in Asia and is also the major financial hub of the world. It comprises over 2,200 companies, most of which are from China.
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Shenzhen Stock Exchange (SZSE), China
Located in Shenzhen, the stock exchange was established in 1990 and is the second-largest stock exchange in China after the Shanghai Stock Exchange. It has over 1,900 companies and most are based in China. The exchange is a trading platform that offers two types of shares-those that can be traded in the local currency and others that are traded in US dollars.
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London Stock Exchange (LSE), United Kingdom
One of the oldest stock exchanges in the world, the London Stock Exchange was set up in 1801 and is run by the London Stock Exchange Group. The exchange has around 3,000 companies listed on it and has two markets- one is the main market with about 300 large companies and the other is the Alternative Investment Market for small companies.
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Toronto Stock Exchange (TSX), Canada
With more than 2,200 companies listed, the Toronto Stock Exchange is a wholly owned subsidiary of the TMX group and was established in 1861. It focuses more on oil and gas, and mining companies.
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Bombay Stock Exchange (BSE), India
The tenth largest stock exchange is the Bombay Stock Exchange which was established in 1875 under British rule and is also the largest in India. It has the highest number of listed companies at over 5,500 but most are small-scale.
Stock exchanges play a significant role in the growth of an economy and with the rise in the number of businesses across the world, the exchanges have seen a surge in the number of listed companies. While the exchanges are not inter-connected, several do have the potential to impact the movement of other stock market indices.
