European Stock Markets and Recent Developments#2

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European Stock Markets and Recent Developments

By : Suchaya Hongstong


Topics • The overview of the European stock markets • Structure and organization of the European stock markets • Major European stock exchange markets and their operations • Recent developments


European Stock Market •

The UK stock financial system played an important roles during the nineteenth century

Before 1995, the European stock markets operated by being isolation and barriers to capital mobility

A reform with advances in computer and telecommunication in mid 1980.

London Stock Exchange (LSE) is the largest European market in term of total market capitalization, listed companies, and volume of trading.

The market value of LSE domestic firms is less than half the size of Tokyo Stock Exchange and only 15% the size of New York Stock Exchange.


Organizations and Structures of Major European stock market Three distinguishable types of organization

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Privately owned and self regulated market State controlled market Semi-independent market


United Kingdom •

Financial institutions in London has provided service to international clients around the world since 1979

In 1993, the Irish Stock Exchange was merged with other British and Irish stock exchange creating the International Stock Exchange of Great Britain and Ireland

In 1995, Dublin Stock Exchange separated from the UK exchange to be an independent Irish Stock Exchange

• FTSE 100 (Footsie): Index of 100 largest companies listed on the London Stock Exchange


Germany •

Foreign stocks were first introduced in 1950s.

The Frankfurt Stock Exchange (FSE), the Germany’s largest and the most important stock market, is operate by Deutsche Borse AG

There are other seven stock markets in Berlin, Hamburg, Hanover, Düsseldorf, Munich, Bremen and Stuttgart

70% of the equities are the foreign equities. And 80% are foreign bonds


Major Stock Market Operations and Activities


London Stock Exchange (LSE) • Started in the 17th Century as London coffee houses and became the city most important financial institution.


London Stock Exchange (LSE) •

LSE became the world’s – global exchange business – equities exchange – pool of capital links to Asia and Africa

A series of reforms called “Big Bang” in 1986

Stock Exchange Automated Quotation (SEAQ)

Alternative Investment Market (AIM) for small companies in 1995

Two primary markets – Main Market – AIM


Deutsche BÖrse (FWB) • Offers a wide range of services and system applications enabling shares and derivatives to be traded under one roof

• FWB introduced an electronic trading system called the Exchange Electronic Trading (XETRA) in 1997


Euronext • Established in 2000 by a merger of Amsterdam, Bressels and Paris exchanges

• Offer financial instruments, trading in securities and derivatives


Recent Developments in European Stock Markets •

Accelerating integration and globalization through the deregulation and development of technology Euro currency has been launched on 1 Jan 1999 with 11 countries Alliance with U.S stock markets •

Pan-European exchanges offers standardization of trading platforms

The Deutsche Borse Frankfurt has merged with LSE to create the new entity called International Exchange (iX)


Thank you


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