History Of The Stock Market
The history of the stock market begins in Cairo almost one millennium ago at the start of the 11th century. Historians suggest that Muslim and Jewish merchants had already set up many of the methods used in the stock market today, and they also established several different forms of trade associations. This makes these traders the pioneers in the history of the stock market.
Although these merchants laid down the foundation for the history of the stock market, it was not until the 13th and 14th centuries that the idea of centralised and organised financial institutions for trading began to flourish. The story goes that a family by the name of Van der Beurze set up a gathering of traders in a building in Antwerp, which was a popular place for trade at the time. The idea soon flourished and 'Beurzen' soon opened up in neighbouring areas. This is contradictory to initial historical data that suggests the Van der Beurze family first began trading from a residence in Bruges.
Regardless, the idea was born and stock market history continued as Venetian bankers began to trade government securities. Soon after, the Venetian government had to outlaw the spreading of rumours to lower prices of government funds. Soon, traders in Verona, Pisa, Genoa and Florence followed suit, and this was only made possible because the former cities were independent states ruled by councils of influential citizens instead of monarchs.
Later, in the early 17th century, the first official stock exchange in the history of the stock market opened - the Amsterdam Stock Exchange. The first company to issue shares on this stock exchange was the Dutch East India Company in 1602, and these were also the first company shares ever released. This is one of the most significant dates in stock market history.
Continuous trade blossomed through the 17th century, and the Dutch are credited for pioneering modern trade and banking methods that have been used and enhanced throughout the history of the stock market. This included birth of Wall St, which was then located in the New Amsterdam settlement.
Wall St began as a continually evolving stockade that consisted of timber, earth and fortified palisades. The defences were necessary to ward off attacks from various Native American tribes. Eventually, the wall was removed and government surveyors mapped out the actual street. By the late 18th century, traders formalised deals and speculations with the Buttonwood Agreement, which was so called after the popular trading location at the end of the street under a buttonwood tree. This was the birth of the New York Stock Exchange.
Nowadays, all major industrialised nations have a stock market, and some countries have several stock markets. The biggest stock exchange is the New York Stock Exchange in the United States, and other major stock exchanges are found in Japan, Europe, UK, China and the Asia-Pacific, which includes Australia.
World's Biggest Stock Exchange
Here is a list of the world's biggest stock exchanges. These are the largest stock markets in the world according to domestic market capitalisation and organised in value according to the US dollar (millions). This YTD list is current as of March 2009, but the order changes on a monthly basis. You can check the latest results at the World Federation of Exchanges.- NYSE Euronext (US) - 7,945,719.2
- Tokyo SE - 2,610,655.2
- NASDAQ - 2,261,713.0
- Shanghai SE - 1,862,672.1
- NYSE Euronext (Europe) - 1,811,968.1
- London SE - 1,676,219.2
- Hong Kong Exchanges - 1,306,754.0
- TSX Group - 1,001,229.7
- Deutsche Brse - 900,680.9
- BME Spanish Exchanges - 831,282.0
- SIX Swiss Exchange - 723,377.9
- Australian SE - 665,346.5
- BM&FBOVESPA - 651,701.7
- Bombay SE - 610,197.9
- National Stock Exchange India - 572,653.3
History Of The Australian Stock Market
The history of the stock market in Australia began in the 19th century in 1861 when the first stock exchange in the country was established in Melbourne. Other cities soon opened stock exchanges of their own, including the Sydney stock exchange (1871), Hobart stock exchange (1882), Brisbane stock exchange (1884), Adelaide stock exchange (1887) and Perth stock exchange (1889). This created a total of six stock exchanges on the Australian stock market.
The stock exchanges held informal interstate conferences that began famously at the 1903 Melbourne Cup. This arrangement ended in 1937 after the US stock market crash and great depression of the 1920s and '30s when the Australian Associated Stock Exchanges (AASE) was created. This allowed uniform rules and regulations to be established.
The Australian stock market history continued with opening of the Sydney Futures Exchange in 1960, and this was followed years later in 1976 with the opening of the options market. Further market initiatives followed, and this includes the establishment of the warrants market in 1990 among others.
Before this, though, came the decisive decision that would set the stage for a national Australian stock exchange as we know it today. In 1985, all stock exchanges and the AASE met to discuss the future of the Australian stock market, and decided upon a single national Australian Stock Exchange, which was amalgamated and operational by 1987.
At the same time, computer-based trading became a reality with the SEATs trading system. At first, only a limited number of stocks used SEATs but eventually all stocks were processed on the system and the trading floor was closed in 1990. In 1993, SEATs was superseded by FAST and finally the CHESS operating system allowed full automation in 1996.
Over the next 10 years, there was important financial reform, and this eventually lead to a merger between the Sydney Futures Exchange and the Australian Stock Exchange in 2006. It was the first of its kind between any two listed exchanges in the world, and it lead to the Australian Stock Exchange changing its name to ASX Limited and trading as the Australian Securities Exchange.
ASX Limited works closely with the Australian Securities and Investment Condition (ASIC) to continually improve trading conditions, market fairness and transparency. The ASX is now one of the world's largest stock exchange and presents a liquid environment that allows Australians to invest in range of financial products and companies.