Big Business: The 10 Largest Stock Exchanges In The World

Most people know that playing the stock market can be pretty lucrative. Of course, many have only a basic understanding of what a stock market is and how it operates.

For business owners, the benefit of the stock market is that it allows for an influx of capital, while also allowing key figures within the company to maintain large stakes in the business. Other ways of expanding an operation, like taking a loan, or bringing in an affluent individual to bankroll the operation, pose unique challenges to a growing company. The first option has the potential to create insurmountable debt. If the company doesn’t do well after it begins to expand, the borrower is on the hook for repaying the investor all the money they borrowed, plus interest.

A decision to bring a partner into the organization means that, besides having to share the profits, the creator of the company will likely have to give a large percentage of the company to a single individual. Usually, the more equity an individual owns in a company, the more say that person will have in the direction of the business.  If the main ownership rights of the company are divided with somebody whose vision runs counter to the business’ creator, the friction could lead to long-term problems for the business.

Much easier is to take a small amount of money from several investors, sharing the profits of the organization with all of them. Convincing one person to offer a massive amount of money is much harder than convincing several people to give small sums. This is the basic idea behind the share market. It is a place for entrepreneurs to sell shares of their company to many people, in order to expand their ventures and make greater profits, which they then share with all their investors on the basis of the number of shares they have bought. When it works, it’s a win-win situation for everyone involved.

The function of stock exchanges, then, is to offer markets where people can sell shares of their companies to interested buyers. While there are many of these exchanges around the world, there are some that have much bigger businesses – and a lot more money – flowing through them. Here are the 10 biggest stock exchanges in the world, ordered on the basis of their annual turnover, market capitalization, and the number of companies involved.

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10 Australian Securities Exchange: $1.386 Trillion Market Cap

Australia’s first stock market, the Australian Securities Exchange was established in 1861 in the city of Melbourne. It has undergone many changes since its creation, and is now Australia’s primary stock exchange, a position cemented by its merger with the Australian Stock Exchange and Sydney Future Exchange in 2006. Known by the acronym ASX, the Australian Securities Exchange boasts of an average daily turnover of $4.685 billion – by selling bonds, stocks and commodities – and a market capitalization of $1.386 trillion.

9 Deutsche Börse Stock Exchange: $1.486 Trillion Market Cap

Located in Frankfurt, Germany, the Deutsche Borse Stock Exchange has a market capitalization of $1.486 trillion, making it slightly larger than the ASX. Established in 1994, this stock exchange is a fairly recent addition to the world of finance. Despite that, it has multiple branches located in many European countries, such as Luxembourg, Spain, and Switzerland. More than 765 companies are listed under it as of 2010, and it employs over 3,200 people throughout Europe, Asia, and the USA. Despite its size, it is one of very few stock exchanges in the world that is involved with charity organizations.

8 Toronto Stock Exchange: $2.058 Trillion Market Cap

With a more than $2.058 trillion market capitalization, the Toronto Stock Exchange is the largest stock market in Canada, the third largest in North America, and the eighth largest in the world. It is based in Toronto, Canada, and is managed by the TMX group. Having its roots in a small business association formed by a group of businessmen in 1852, this stock exchange now encompasses over 1,577 different companies from Europe, Canada, and the United States. It concentrates on energy companies such as Cameco, Husky Energy, Nexen, and Imperial Oil, all of which fall within the top 40 companies listed by this stock exchange.

7 Shanghai Stock Exchange: $2.547 Trillion Market Cap

The Shanghai Stock Exchange is the second largest stock market in China, and the third largest in Asia, with a market capitalization of $2.547 trillion. Based in Shanghai, it was established in 1990 as a non-profit organization that is directly administered by the CSRC (China Securities Regulatory Commission). Due to government administration and strict CSRC regulations, it is not fully open to foreign investors. Despite this limitation, over 861 different companies are listed by this stock exchange.

6 Hong Kong Stock Exchange: $2.831 Trillion Market Cap

Located in Hong Kong, this stock exchange has more lenient policies for foreign investors in comparison to the Shanghai Stock Exchange. It was first established as “Association of Brokers, Hong Kong” in the year 1891, and was renamed in 1914. Despite competing with multiple stock exchanges throughout the years, it has remained the leading stock market in Hong Kong. With a market capitalization of $2.831 trillion, it is the largest stock exchange in China, and the sixth largest in the world. The Hong Kong Stock Exchange lists 1,470 companies from around the world.

5 EuroNext: $2.93 Trillion Market Cap

A  European stock exchange based in Amsterdam, Netherlands, EuroNext was established in the year 2000 after the harmonization of the European Union. It has branches in other European countries like Belgium, France, Portugal and the UK. As of 2010, the EuroNext group had a market capitalization of $2.93 trillion, which makes it the fifth largest stock exchange in the world. Having merged with NYSE Group in 2007, it is a truly global stock exchange, and is advertised as such. Its main markets are equities and derivatives, though it provides clearing and information services as well.

4 London Stock Exchange: $3.396 Trillion Market Cap

Established in 1801, it is the one of the oldest organized stock exchanges in the world. Now encompassing 3,000 companies from 70 different countries, it is a massive international market for buying and selling shares, and is based in Paternoster Square, London. Having merged with the TMX group in 2011, it is the largest stock exchange in Great Britain. The London Stock Exchange has a market capitalization of $3.396 trillion USD, which makes it the fourth largest stock market in the world. It has the highest market capital value among stock exchanges in Europe.

3 Tokyo Stock Exchange: $3.478 Trillion Market Cap

The Tokyo Stock Exchange is the largest stock exchange in Asia, and the third largest in the world, boasting a market capitalization of $3.478 trillion. Established in 1878, and based in Tokyo, Japan, the TYO lists 2,292 companies as of 2012. The Tokyo Stock Exchange introduced new transaction procedures in 2005, but had to be shut down for 4.5 hours due to bugs in the system, which was developed by Fujitsu. It merged with Osaka Securities Exchange in mid 2012. The Tokyo Stock Exchange is also closely allied with the London Stock Exchange, which makes international trade easier.

2 NASDAQ Stock Exchange: $4.582 Trillion Market Cap

NASDAQ stands for National Association of Securities Dealers Automated Quotations. Based in New York, USA, the NASDAQ Stock Exchange was established in the year 1971. It is the second largest stock exchange, not just in North America, but the entire world. The NASDAQ Stock Exchange is owned by the NASDAQ OMX group, which owns a whole network of stock markets, including exchanges in eight European countries. It was the first stock exchange in America to start trading online. With a massive market capitalization of 4.582 trillion USD, it is second only to the New York Stock Exchange.

1 New York Stock Exchange: $16.613 Trillion Market Cap

The absolute king of stock market,  its location – Wall Street, New York – is well-known worldwide as a Mecca of international trade. Also known as the “Big Board”, the origins of the New York Stock Exchange can be traced back to the year 1792. It is the largest stock exchange in the world, with an enormous market capitalization of $16.613 trillion USD as of May 2013. In the year 2013, its average daily transaction has been over $169 billion. Due to its magnitude, the New York Stock Exchange is a subject of constant terror threats. Unlike NASDAQ, it offers both electronic and manual stock trading capability.

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