While there are over 60 stock exchanges around the world, the 16 largest stock exchanges in the world in 2017 alone have a market capitalization of over $1.0 trillion, being sometimes referred to as the “$1 Trillion Club.” These 16 exchanges account for around 85% of the global market capitalization, which is worth over $76 trillion.
While most of us associate stock exchanges with charts, graphs, indexes, and other data that is available online and can be used within seconds via a device that has a stable internet connection, the history of stock exchanges can be traced as far back as ancient Rome, where some historians suggest there were companies whose employees held shares that fluctuated in price over time based on the organization’s performance. One of the oldest official stock exchanges is believed to be the Frankfurt Stock Exchange, which was established in 1585, but the first corporate stock was traded in the early 1600s by the Dutch East India Company.
Fast forward to today and there are hundreds of thousands of companies that are traded on the global stock markets, with many companies choosing to list their shares and sell them to the general public in order to raise capital. Big and small investors use stock exchanges to generate income for themselves to use for retirement or for their clients. Because of the high exposure of businesses to the stock market and the involvement of many people who in one way or another hold shares of different companies, the stock market is used as one of the determinants of the health of a country’s economy and investors’ sentiment towards that economy.
The correlation between the stock market and the economy is deeper than it might seem at first. Since many companies rely on stock markets to raise capital, if the share prices drop, firms struggle to raise capital and to grow, which in turn affects employment and economic growth. Moreover, in many countries in the developed world, large shares of the population have private pension plans with various funds, which invest large shares of their assets in the stock market. Therefore, any large movement and long-term trends affect retired people, who rely on pensions for the income that they need for housing, food and other items.
Over the last decade and a half, the global market capitalization has more than doubled. However, the global crisis and the following Eurozone sovereign debt crisis put a strain on the growth of the Western stock markets, which even though they did see some growth, was much lower compared to the rest of the world. Most growth in the total market capitalization came from the Asian emerging markets. The leader in stock market growth is China, which between 2003 and 2016, saw the total capitalization of its stock markets surge by a staggering 1,480%. However, in absolute terms, the U.S is the leader, due to the fact that it’s the home of the two largest stock exchanges: the New York Stock Exchange, owned by Intercontinental Exchange Inc (NYSE:ICE), and the NASDAQ, owned by Nasdaq Inc (NASDAQ:NDAQ). The total market capitalization in the U.S surged to $65.6 trillion from $28.1 trillion during the 2003-2013 period, which represents growth of 133%.
With this in mind, let’s take a look at the 16 largest stock exchanges in the world in 2017. The data was taken from the World Federation of Exchanges, with the exception of the London Stock Exchange, which left the WFE in 2013. You can also compare how the numbers have changed since 2014, when we compiled a list of the 20 largest stock exchanges in the world.