If you want to enter the world of investing in global stock exchanges but are not sure what first steps to take, you have come to the right place. In this guide, we will cover the basics of investing in global stock exchanges.
Global stock exchange helps companies generate capital and allows ordinary people like you and me to invest in publicly listed companies.
The performance of global stock exchanges can be considered a broad indicator of the state of the economy and general sentiment towards portfolio investment. Thus, news about the rise or fall of global stock exchanges signals how the business and investment world is performing overall.
We will explore the largest global stock exchanges, how to make more informed investment decisions, and discuss the benefits and risks of this type of investment.
Global Stock Exchanges – Quick Guide
- Discover the major global stock exchanges: Discover the world's largest, where companies generate capital and investors can grow their wealth through publicly listed companies.
- Learn how to gain exposure to stock exchanges: You cannot trade on the price of a stock exchange directly, but you can gain exposure to the overall performance of companies on the largest stock exchanges by trading or investing in the shares of individual companies on the exchanges, or an exchange traded fund (ETF) – which tracks the performance of a basket of shares.
- Access the top 10 stock exchanges with CAPEX.com: Buy shares of stocks or ETFs by opening an Invest account or start trading margin contracts on the price of indices, stocks and ETFs by opening a Trading account. Alternatively, build your confidence in a risk-free environment by opening a demo account.
If you don’t feel ready to start, you can learn more about financial markets with CAPEX Academy’s range of online trading and investing courses.
What is global stock exchange and How it Works?
Most likely, the bustling trading floor of the New York Stock market (NYSE) comes to mind when you think of a global stock exchange. There, hundreds of brokers can be seen mingling and shouting buy and sell orders at one another. That provides you with a roughly accurate understanding of how a global stock exchange operates: Buyers and sellers congregate there to exchange stocks.
A global stock exchange is a marketplace where financial instruments such as equities and bonds are traded. Historically, global stock exchanges were physical locations where traders would meet face-to-face to buy and sell securities. Today, most trading is handled electronically, which enhances access to international markets and ensures efficient processing of trades.
When a company conducts an initial public offering (IPO), it sells shares to public shareholders in the primary market. These shares then become available on the secondary market, where they can be traded among investors. The exchange provides liquidity, ensuring that there is always capital available for transactions, and offers real-time pricing information to help investors make informed decisions.
Not every company can trade on a global stock exchange; they must meet strict listing requirements. These requirements include registration with regulatory bodies, maintaining a minimum number of shareholders and shares outstanding, and meeting various other standards.
Exchanges also produce real-time pricing information, facilitating informed investment decisions and efficient market functioning. also, not just anyone can show up at a stock exchange and buy shares, however. Trading is handled by brokers and dealers that meet strict stock exchange membership requirements.
The most important and largest global stock exchanges
Though there are over 60 major global stock exchanges in the world, most action takes place in just a handful. These key exchanges play a crucial role in the global economy by facilitating the buying and selling of securities, providing liquidity, and offering a platform for companies to raise capital.
The New York Stock Exchange (NYSE) is the largest stock exchange in the world, with an equity market capitalization of over 28 trillion U.S. dollars as of March 2024. The following three exchanges were the NASDAQ Exchange, the Euronext Exchange, and the Japan Exchange Group.
While the Saudi Stock Exchange (Tadawul) ranks first in the Arab world, it ranks 11th globally in terms of market capitalization, according to the March 2024 Statistics report.
Source: statista.com
Among these exchanges, a few stand out due to their size, trading volume and influence on international financial markets, including:
US global Stock Exchanges
The two major U.S. financial securities markets are the New York Stock Exchange and Nasdaq Exchange.
New York Stock Exchange (NYSE)
The New York Stock Exchange (NYSE), located on Wall Street in New York, is the world's largest stock exchange by market capitalization. Founded in 1790 and officially named NYSE in 1963, it has endured significant events like the Wall Street Crash of 1929 and Black Tuesday in 1987. Despite the dominance of electronic trading, the NYSE maintains a physical trading floor, famous for its 9:30 am opening bell, often rung by prominent business figures and celebrities.
In 2007, the NYSE merged with the European exchange Euronext, forming NYSE Euronext, which also owns NYSE Arca. With over 6,332 companies listed, including giants like Berkshire Hathaway, ELi Lilly, Visa, JPMorgan, Exxon Mobil, the NYSE's market capitalization exceeded $28.4 trillion in the second quarter of 2024. The exchange requires companies to have a minimum of 400 shareholders and 1.1 million shares outstanding to be listed, providing a robust platform for diverse sectors such as finance, healthcare, consumer goods, and energy.
The New York Stock Exchange is one of the largest stock exchanges in the world. It is home to the strongest US stocks.
National Association of Securities Dealers Automated Quotation System (Nasdaq)
The Nasdaq Stock Exchange, located in Times Square, New York, was founded in 1971 by the National Association of Securities Dealers. Unlike traditional exchanges, Nasdaq has always utilized an electronic, computer-based system for trading, making it the first electronic stock exchange. This modern approach contrasts with the open outcry system historically used by other exchanges.
As the second-largest stock exchange by market capitalization, Nasdaq reached $25.4 trillion as of second quarter of 2024. It is particularly notable for its dominance in technology stocks, listing giants such as Microsoft, Apple, Nvidia, Alphabet, and Amazon. The Nasdaq 100 index is used to measure the performance of these tech-heavy listings. The exchange's lower listing fees and modern infrastructure attract many of the largest companies in the world.
European global Stock Exchanges
The major European financial securities markets are the Euronext Stock Exchange, London Stock Exchange, and Frankfurt Stock Exchange:
Euronext Stock Exchange
Euronext is a pan-European stock exchange based in Amsterdam, Netherlands, formed in 2000 through the mergers of the Amsterdam, Paris, and Brussels stock exchanges. It represents the European economy, operating in euros, and has expanded by acquiring exchanges in Portugal, Ireland, and Italy. This exchange is the largest in Europe and one of the largest globally.
In 2007, Euronext merged with the NYSE Group to form NYSE Euronext, later becoming a standalone entity again in 2014 after being acquired and then spun off by the Intercontinental Exchange. Euronext now includes 1,900 listed companies across multiple countries, with a market capitalization exceeding €7.2 trillion as of the second quarter of 2024. Its performance is tracked by indices such as the Euronext 100, which includes major companies like AXA, BNP Paribas, and Renault.
London Stock Exchange
The London Stock Exchange (LSE) is the largest stock exchange in Europe and one of the oldest, with origins dating back to 1698. It became a formal entity in 1801, establishing itself as a hub for international trade, banking, and insurance. By 2007, the LSE merged with Borsa Italiana to form the London Stock Exchange Group, enhancing its global influence and reach.
The LSE had a market capitalization of $3.42 trillion as of second quarter of 2024, tracking its performance through indices like the FTSE 100, which includes top companies such as Barclays, BP, and GlaxoSmithKline. Additionally, indices like the FTSE 250 and FTSE All-Share offer traders comprehensive market insights, maintaining its status as a key player in global finance
Frankfurt Stock Exchange
The Frankfurt Stock Exchange (FRA) holds a significant position in the global financial landscape. With origins dating back to medieval times, it officially became Germany's leading stock exchange after World War II. Owned by Deutsche Börse AG, it operates as the largest of Germany's seven stock exchanges, facilitating trading through advanced electronic systems like Xetra and Börse Frankfurt.
The FRA boasts impressive market capitalization, reaching $2.30 trillion as of second quarter of 2024, making it the tenth largest stock exchange globally. Its primary index, the DAX, tracks the performance of the top 30 companies listed on the FWB, including industry giants like Adidas, BMW, and E.ON. As Germany's largest economy, the FRA captures approximately 90% of the country's turnover and a substantial share of Europe's trading volume, underlining its vital role in the region's financial ecosystem.
Bucharest Stock Exchange
The Bucharest Stock Exchange (BVB) serves as Romania's primary stock exchange, situated in Bucharest. Over the years, the BVB has experienced notable growth, with its market capitalization $50.79 billion as of the second quarter of 2024. As of the same year, there were 85 companies listed on the exchange, reflecting the increasing vibrancy of Romania's capital market.
The BVB plays a pivotal role in the Romanian economy, with its capitalization relative to GDP reaching 17.9% by the end of 2019. Notably, key stock exchange indices like the BET and BET-TR witnessed significant upticks, reflecting the market's robust performance. Companies like Banca Transilvania (TLV), Fondul Proprietatea (FP), BRD - Groupe Société Générale (BRD), Romgaz (SNG), and OMV Petrom (SNP) emerged as the most liquid entities within the BVB's main market. Moreover, the BVB's promotion to the category of Secondary Emerging Market by the FTSE Russell rating agency underscores its growing prominence and potential within the global financial landscape.
Asian global Stock Exchanges
The three main Asian stock exchanges are the Tokyo Stock Exchange, the Hong Kong Stock Exchange, and the Shanghai Stock Exchange:
Tokyo Stock Exchange
The Tokyo Stock Exchange (TSE), founded in 1878, stands as Japan's foremost financial market, boasting a diverse portfolio of 3,784 listed companies. Managed by the Japan Exchange Group, it serves as the home for major Japanese corporations like Toyota, Honda, and Mitsubishi, offering a wide range of trading information and index data.
Despite facing challenges, such as the collapse of the Japanese asset price bubble in 1989, the TSE has endured, adapting to economic shifts. with market capitalization of $6.66 trillion as of the second quarter of 2024. and with a dynamic board, including key figures like Director Tsuda Hiroki and CEO Kiyota Akira, the exchange remains a pivotal player in Japan's economic landscape, guiding investors through market fluctuations.
Hong Kong Stock Exchange
The Hong Kong Stock Exchange (HKG) stands as a cornerstone of Asia's financial landscape, boasting significant market capitalization and a wide range of securities. As a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), established in 2000, it collaborates with other HKEX entities, including the Hong Kong Futures Exchange and the Hong Kong Securities Clearing Company. With a combined market capitalization of $3.87 trillion as of the second quarter of 2024.
Securities trading on the Hong Kong Stock Exchange unfolds throughout the week, commencing with pre-opening sessions and concluding with after-hours trading. Derivative trading, with intermittent breaks, runs from morning to evening, catering to diverse investor needs. Notably, the exchange maintains a dynamic trading schedule, offering extended after-hours trading sessions until the early hours of the following day. However, trading halts on major holidays, ensuring operational efficiency and market stability.
Shanghai Stock Exchange
The Shanghai Stock Exchange (SSE) stands as mainland China's premier financial market, overseen by the China Securities Regulatory Commission (CSRC). Trading a variety of financial instruments including stocks, funds, bonds, and derivatives, the SSE plays a crucial role in China's economic landscape. with a market capitalization of $6.55 trillion as of the second quarter of 2024.
At the Shanghai Stock Exchange (SSE), companies offer two primary classes of stocks: A-shares and B-shares. B-shares, traded in US dollars, are accessible to foreign investors, while A-shares, denominated in yuan, require participation in a qualified program (QFII) for foreign investment. Additionally, Chinese equities are traded on the Hong Kong Exchange as H-shares, providing another avenue for international investors.
Arabic Stock Exchanges
The two major Arabic Exchanges markets are the Saudi Stock Exchange (Tadawul) and Abu Dhabi Securities Exchange (ADX).
Saudi Stock Exchange (Tadawul)
The Saudi Stock Exchange, or Tadawul, is the sole stock exchange in Saudi Arabia and a key market within the Gulf Cooperation Council (GCC) countries. Initially informal with only 14 companies in the 1970s, it was regulated in 1984 and the Capital Market Authority (CMA) was established in 2004. By 2007, the Saudi Stock Exchange (Tadawul) Company was formed. Tadawul offers equities, sukuk (Islamic bonds), ETFs, and mutual funds, with nearly 200 companies listed and tracked by the Tadawul All Share Index (TASI). The market capitalization of the Saudi Stock Exchange has reached $2.93 trillion as of second quarter of 2024.
Foreign investment in Tadawul is limited to institutional investors with at least $5 billion in assets under management and a minimum of five years in business. Retail investors can access the market indirectly through ETFs focused on Middle Eastern companies, such as the SPDR S&P Emerging Middle East and Africa ETF (GAF) and the WisdomTree Middle East Dividend Fund (GULF). An agreement with Nasdaq in 2017 modernized Tadawul’s post-trade technology, enabling the introduction of derivatives and new asset classes.
Abu Dhabi Securities Exchange (ADX)
The Abu Dhabi Securities Exchange (ADX), established in 2000, is a prominent stock exchange in Abu Dhabi, the capital of the UAE. It provides a transparent and reliable marketplace for global investors with advanced trading systems and a stringent regulatory framework. ADX lists companies from diverse sectors such as banking, real estate, telecommunications, and energy, allowing investors to build well-diversified portfolios through informed decisions based on company performance and financial reports.
With around 65 listings and a market capitalization of $796.96 billion as of the second quarter of 2024, ADX is regulated by the Securities and Commodities Authority (SCA). It offers various securities, including public joint stock company shares, debt instruments, and ETFs. ADX aims to enhance financial and economic stability by developing trading methods and promoting investment awareness, supporting the UAE's economy by ensuring fair and accurate transactions and price stability.
Global Stock Exchanges Trading Hours
New York Stock Exchange (NYSE)
The New York Stock Exchange is open Monday through Friday from 9:30 am to 4:00 pm Eastern Daylight Time (GMT-04:00).
Nasdaq Exchange
The NASDAQ Stock Exchange is open Monday through Friday from 9:30 am to 4:00 pm Eastern Daylight Time (GMT-04:00).
Euronext Stock Exchange (ENX)
The Euronext Amsterdam Stock Exchange is open Monday through Friday from 9:00 am to 5:30 pm Central European Summer Time (GMT+02:00).
London Stock Exchange (LSE)
The London Stock Exchange is open Monday through Friday from 8:00 am to 4:30 pm British Summer Time (GMT+01:00).
Frankfurt Stock Exchange (FSX)
The Frankfurt Stock Exchange is open Monday through Friday from 8:00 am to 10:00 pm Central European Summer Time (GMT+02:00).
Bucharest Stock Exchange
The Bucharest Stock Exchange is open Monday through Friday from 10:00 am to 5:45 pm Eastern European Summer Time (GMT+03:00).
Tokyo Stock Exchange (JPX)
The Tokyo Stock Exchange is open Monday through Friday from 9:00 am to 11:30 am and 12:30 pm to 3:00 pm Japan Standard Time (GMT+09:00).
Hong Kong Stock Exchange (HKEX)
The Hong Kong Stock Exchange is open Monday through Friday from 9:30 am to 12:00 pm and 1:00 pm to 4:00 pm Hong Kong Standard Time (GMT+08:00).
Shanghai Stock Exchange (SSE)
The Shanghai Stock Exchange is open Monday through Friday from 9:30 am to 11:30 am and 1:00 pm to 2:57 pm China Standard Time (GMT+08:00).
Saudi Stock Exchange (Tadawul)
The Saudi Stock Exchange is open Sunday through Thursday from 10:00 am to 3:00 pm Arabian Standard Time (GMT+03:00).
The Abu Dhabi Securities Exchange (ADX)
The Abu Dhabi Securities Exchange is open Monday through Friday from 10:00 am to 2:44 pm Gulf Standard Time (GMT+04:00).
How to start investing on global Stock Exchange
The first thing you need to invest in global stock exchange is access to the market through a brokerage account. The process of opening a brokerage account is like that of opening a checking account. The next step is to identify which securities you want to buy and how much you want to invest in that security. Do your research and evaluate your risk appetite before you make that decision. Lastly, place an order to buy the securities.
1. Open and Fund an Invest Account with us
These accounts are offered by companies such as CAPEX.com. Opening a brokerage account is typically a quick and painless process that takes only minutes. You can easily fund your brokerage account via an electronic funds transfer or any other payment method available in your country.
With CAPEX.com you can buy and sell stocks outright (i.e. trade real shares) via an Invest Account, but you can also trade stock and Forex, commodities, bonds, ETFs, indices via margin contracts.
2. Research and Select Your securities
Before you start investing in the exchanges here are the important concepts to master before you get started:
- Diversify your portfolio.
- Invest only in businesses you understand.
- Avoid securities risks until you master investing.
- Learn the basic metrics and concepts for evaluating securities.
With CAPEX.com you can invest in +5,000 stocks and ETFs listed on 10 global exchanges, and trade 2,000 margin contracts on shares for short-term speculations or to hedge a stock portfolio.
3. Buy and Sell securities on Our Platform or App
How much you should invest in global exchanges is completely up to you. There’s basically no minimum amount you’re required to invest in exchanges with us, but there may be certain deposit requirements. You should only ever invest an amount that you’re willing to risk, as the markets could move against you.
Log in to your account and go to our investing platform. From there, you can invest in thousands of popular stocks, from exchanges across the world. Simply search for your preferred stock, or ETF on our platform, open its chart, and place your order.
With CAPEX WebTrader you can build, adjust, and monitor your portfolio, all in one place, or invest on the move through our full-featured mobile app for phones or tablets, iOS and Android.
The bottom line on investing in global Stock Exchange
Investing in global stock exchanges across American, European, Asian, and Arab markets offers diversified opportunities across various sectors and regions. Each region's exchanges have unique features and regulatory frameworks, providing a broad spectrum of investment options from technology giants to energy and financial sectors.
These exchanges facilitate access to equities, bonds, and other financial instruments, catering to different investor profiles. Despite market volatility, such as historical downturns in specific indices, the potential for growth in emerging markets and established financial centers presents significant opportunities for informed and strategic investments.
Free resources
Before you start investing in global stock exchanges and other assets, you should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free trading and investing courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how margin contracts work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading.
Sources:
- https://www.statista.com/topics/1009/global-stock-exchanges/#statisticChapter
- https://www.investopedia.com/articles/basics/04/092404.asp
- https://www.forbes.com/advisor/investing/stock-exchange/
- https://en.wikipedia.org/wiki/Stock_exchange
- https://www.tradinghours.com/markets
- https://finance.yahoo.com/news/30-largest-stock-exchanges-world-031445008.html
- https://companiesmarketcap.com/