There is no standardized answer as there are a number of different ways to measure the best stock market in the world. Some people may consider the market with the highest return on investment to be the best, while others might consider the market with the lowest volatility to be superior. Ultimately, it depends on an individual’s goals and preferences when determining which stock market is best.
That being said, there are a few markets that tend to stand out when compared side-by-side. The New York Stock Exchange (NYSE) is often considered to be one of the premier stock markets in the world, due in part to its size and liquidity. The Nasdaq Composite Index, meanwhile, is known for its large contingent of tech stocks and high-growth companies. Finally, London’s FTSE 100 Index includes many blue chip firms and is often seen as a barometer for global equity markets.
The NASDAQ was founded in 1971 as a way to electronically trade securities on a computerized platform. Today, the NASDAQ is home to more than 3,000 companies, including some of the world’s largest tech firms like Apple, Microsoft, Amazon, and Facebook.
The NASDAQ has been one of the best performing stock markets in recent years. In 2017, it hit an all-time high of 6762.16 points and continues to set new records in 2018. For investors looking to get exposure to some of the world’s most innovative companies, there is no better place than the NASDAQ.
Tokyo Stock Exchange
The TSE is divided into two sections: the First Section for large companies and the Second Section for smaller companies. The First Section is further divided into three sub-sections: Large Cap, Mid Cap, and Small Cap. The majority of trading on the TSE takes place in the First Section.
There are a few hundred stocks listed on the TSE’s First Section and about 3,700 stocks listed on the Second Section. The vast majority of stocks traded on the TSE are Japanese stocks, but there are also a small number of foreign stocks that trade on the exchange.
Most foreign investors who want to invest in Japanese stocks will do so through one of two methods: they will either buy shares directly on the TSE or they will purchase them through a broker that specializes in trading Japanese equities. For most investors, buying shares directly on the Tokyo Stock Exchange is not an option due to both logistical difficulties (e.g., dealing with different time zones) and regulatory hurdles (e.g., needing approval from Japan’s Financial Services Agency). Therefore, most foreigners who want to invest in Japanese stocks will do so through brokers that offer access to these markets.
Shanghai Stock Exchange
The SSE is home to many large Chinese companies, such as China Mobile and Industrial and Commercial Bank of China. These companies have a combined market capitalization of over US$1 trillion. The SSE is also home to several foreign companies, such as JPMorgan Chase and HSBC Holdings.
The SSE offers two different types of trading: spot trading and futures trading. Spot trading is where investors trade shares at the current price, while futures trading is where investors agree to buy or sell shares at a future date and price. Futures contracts are commonly used by investors to hedge against changes in share prices.
The SSE has strict listing requirements for companies wanting to list on the exchange. Companies must be profitable for three consecutive years before they can list on the exchange. In addition, companies must have a market capitalization of at least RMB 200 million (US$32 million).
Listing on the SSE gives companies access to a large pool of potential investors from all over China and around the world. This can help them raise funds more easily than if they were only listed on a smaller exchange.
London Stock Exchange
The Exchange was founded in 1801 and its current premises are situated on Paternoster Square, close to St Paul’s Cathedral in the City of London. The LSE is part of IntercontinentalExchange (ICE), an American futures exchange operator which also owns and operates exchanges across Europe and North America including the New York Stock Exchange and ICE Futures Europe.
The LSE has over 3,000 listed companies with a combined market capitalisation of around Â£3 trillion as of early 2018, making it one of the largest stock exchanges in the world by this measure. It is also ranked as one .
Shenzhen Stock Exchange
Shenzhen Stock Exchange uses a unique dual-class share structure for listed companies, which gives different voting rights to different shareholders according to their shareholding class. This has been criticized as giving too much power to controlling shareholders at the expense of minority shareholders. Nevertheless, many major global institutional investors such as Fidelity Investments, BlackRock and Deutsche Asset Management have invested in Shenzhen-listed companies.
The Shenzhen Stock Exchange trades stocks, bonds, exchange-traded funds (ETFs), and mutual funds. It also offers derivatives trading and futures trading products such as commodity futures and options on indexes and stocks. The exchange trades currency pairs denominated in Chinese yuan including offshore yuan pairs such as USD/CNH (US dollar vs offshore Chinese yuan).