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
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Before 1995, the European stock markets operated by being isolation and barriers to capital mobility
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A reform with advances in computer and telecommunication in mid 1980.
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London Stock Exchange (LSE) is the largest European market in term of total market capitalization, listed companies, and volume of trading.
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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
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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
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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.
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The Frankfurt Stock Exchange (FSE), the Germany’s largest and the most important stock market, is operate by Deutsche Borse AG
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There are other seven stock markets in Berlin, Hamburg, Hanover, Düsseldorf, Munich, Bremen and Stuttgart
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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
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A series of reforms called “Big Bang” in 1986
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Stock Exchange Automated Quotation (SEAQ)
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Alternative Investment Market (AIM) for small companies in 1995
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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 •
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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
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The Deutsche Borse Frankfurt has merged with LSE to create the new entity called International Exchange (iX)
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