International Stock Exchanges
Total Page:16
File Type:pdf, Size:1020Kb
ΑΛΕΞΑΝ∆ΡΕΙΟ ΤΕΧΝΟΛΟΓΙΚΟ ΕΚΠΑΙ∆ΕΥΤΙΚΟ Ι∆ΡΥΜΑ ΘΕΣΣΑΛΟΝΙΚΗΣ ΣΧΟΛΗ ΟΙΚΟΝΟΜΙΑΣ ΚΑΙ ∆ΙΟΙΚΗΣΗΣ ΤΜΗΜΑ ΛΟΓΙΣΤΙΚΗΣ INTERNATIONAL STOCK EXCHANGES -ΠΤΥΧΙΑΚΗ ΕΡΓΑΣΙΑ- ΟΙ ΦΟΙΤΗΤΡΙΕΣ Ο ΕΠΙΒΛΕΠΩΝ ΚΑΘΗΓΗΤΗΣ ΣΚΟΥΤΑΡΙ∆ΟΥ ΕΛΕΝΗ ΓΚΙΟΥΡΗΣ ΘΕΟ∆ΩΡΟΣ ΤΣΕΛΕΠΗ ΑΛΕΞΑΝ∆ΡΑ ΧΑΒΟΥΖΗ ΕΥΑΓΓΕΛΙΑ -ΘΕΣΣΑΛΟΝΙΚΗ 2008- CONTENTS 1. INTRODUCTION - THE HISTORY OF STOCK EXCHANGES………3 2. LONDON STOCK EXCHANGE (LSE)…………………………….…4-40 3. NEW YORK STOCK EXCHANGE (NYSE)………………………..41-52 4. AUSTRALIAN STOCK EXCHANGE (ASE)……………………….53-63 5. NASDAQ STOCK EXCHANGE………………………………….…64-81 6. BOMBAY STOCK EXCHANGE (BSE)…………………………….82-92 7. SHANGHAI STOCK EXCHANGE (SSE)………………………...93-106 8. TORONTO STOCK EXCHANGE (TSE)………………………..107-118 9. TOKYO STOCK EXCHANGE (TSE)……………………………119-134 10. HONG KONG STOCK EXCHANGE ………………………..…135-161 11. MADRID STOCK EXCHANGE (MSE)……………………..….162-172 12. SWISS STOCK EXCHANGE (SSE)…………………………..173-188 13. FRANKFURT STOCK EXCHANGE (FSE) …………………..189-199 14. CONCLUSIONS…………………………………………………..200-204 15. APPENDIX 16. BIBLIOGRAPHY 2 INTRODUCTION THE HISTORY OF STOCK EXCHANGES The history of stock exchanges can be traced to 12th century in France, when the first brokers are believed to have developed, trading in debt and government securities. Unofficial stock markets existed across Europe through the 1600s, where brokers would meet outside or in coffee houses to make trades ). The Amsterdam Stock Exchange, created in 1602, became the first official stock exchange when it began trading shares of the Dutch East India Company. These were the first company shares ever issued. By the early 1700s there were fully operational stock exchanges in France and England and America followed in the later part of the century. Stock exchanges became an important way for companies to raise capital for investment, while also offering investors the opportunity to share in company profits. The early days of the stock exchange experienced many scandals and stock crashes, as there was little to no regulation and almost anyone was allowed to participate in the exchange. Today, stock exchanges operate around the world, and they have become highly regulated institutions. Investors wanting to buy and sell stocks must do so through a stock broker, who pays to own a seat on the exchange. Companies with stocks traded on an exchange are said to be 'listed' and they must meet specific criteria, which varies across exchanges. Most stock exchanges began as floor exchanges, where traders made deals face-to-face. The largest stock exchange in the world, the New York Stock Exchange, continues to operate this way, but most of the world's exchanges have now become fully electronic. In our diplomacy project we will try to compare elements about twelve of the major Stock Exchanges in the world by Market Capitalization & Year-to-date Turnover at the end of October 2007 as they were published on wikipedia’s web side such as Νew York’s, London’s, Hong Kong’s, Australia’s, Shanghai’s etc. 3 LONDON STOCK EXCHANGE The London Stock Exchange (LSE) is a stock exchange located in London, England. Founded in 1801 and it is one of the largest stock exchanges in the world, with many overseas listings as well as UK companies. The London Stock Exchange is also one of the world’s oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the Exchange quickly grew to become the City’s most important financial institution. Over the centuries following, the Exchange has consistently led the way in developing a strong, well-regulated stock market and today lies at the heart of the global financial community. The trade in shares in London began with the need to finance two voyages: The Muscovy Company's attempt to reach China via the White Sea north of Russia, and the East India Company voyage to India and the east. Unable to finance these costly journeys privately, the companies raised the money by selling shares to merchants, giving them a right to a portion of any profits eventually made. The idea soon caught on (one of the earliest was the Earl of Bedford's scheme to drain the fens). It is estimated that by 1695 there were 140 joint-stock companies. The trade in shares was cantered round the City's Change Alley in two coffee shops: Garraway's and Jonathan's. The broker John Castaing published the prices of stocks and commodities called The Course of the Exchange and other things in these coffee-shops. In 1697 a law was passed to "restrain the number and ill-practice of brokers and stockjobbers" following a number of insider trading and market-rigging incidents. It required all brokers to be licensed and to take an oath promising to act lawfully. In 1697 John Castaing begins to issue “at this Office in Jonathan’s Coffee-house” a list of stock and commodity prices called “The Course of the Exchange and other things”. It is the earliest evidence of organised trading in marketable securities in London. In 1698 Stock dealers are expelled from the Royal Exchange for rowdiness and start to operate in the streets and coffee houses nearby, in particular in Jonathan’s Coffee House in Change Alley. The Change Alley exchange thrived. However, it was to suffer a set-back in 1720. The wave of speculative fever known as the “South Sea Bubble” bursts and much excitement was caused by the South Sea Company, stoked by brokers, the company's owner John Blunt and the government. Having set up the unprofitable company nine years previously the government hoped to wipe out the large debts accumulated by offering shares to the public. Shares in the company, which had started at £128 each at the start of 4 the year, were soon fetching as much as £1,050 by June. The bubble inevitably burst, with share prices plunging to £175, then £124. The incident caused outcry, forcing the government to pass legislation to prevent another bubble, and it took a long time for the stock exchange to recover. Jonathan's burnt down in 1748, and this, plus dissatisfaction with the overcrowding in the Alley, made the brokers build a New Jonathan's on Thread needle Street, as well as charging an entrance fee. In 1761 a group of 150 stock brokers and jobbers form a club at Jonathan's to buy and sell shares. And in 1773 the brokers erect their own building in Sweeting’s Alley, with a dealing room on the ground floor and a coffee room above. Briefly known as “New Jonathan’s”, members soon change the name to “The Stock Exchange”. On 3 March, 1801 the business reopens under a formal membership subscription basis. On this date, the first regulated exchange comes into existence in London, and the modern Stock Exchange is born. The building was soon renamed the Stock Exchange, only to renamed again as the Stock Subscription Room, with new membership regulations. However, this too proved unsatisfactory, and the exchange moved to the newly built Capel Court in the same year. In 1802 the Exchange moves into a new building in Capel Court. And in 1812 the first codified rule book is created. The exchange had recovered by the 1820s, bolstered by the growth of the railways, canals, mining and insurance industries (there were, however, problems with stags and dividend payments). Regional stock exchanges were formed across the UK. Bonds (or gilt- edged securities) also began to be traded. In 1836 the first regional exchanges open in Manchester and Liverpool. After a period of 9 years in 1845 a more speculative fever – this time “Railway mania” – sweeps the country and in 1854 the Stock Exchange was rebuilt. In 1876 a new Deed of Settlement for the Stock Exchange comes into force. The Great War in 1914 means the Exchange market is closed from the end of July until the New Year. The Stock Exchange Battalion of Royal Fusiliers is formed – 1,600 volunteered, 400 never returned In 1923 the Exchange receives its own Coat of Arms with the motto “Dictum Meum Pactum” (My Word is My Bond). People only know the English "My word is my bond"; and, due to the difficulty of locating the original Latin motto (from which the English version is taken), produce a fake coat of arms for their business embellished with the Latin motto verbum meum pactum. At first sight, this seems that is right. - for this Latin motto also means "My word is my bond" - but whilst dictum meum pactum very definitely means "The 5 words that come out of my mouth are my bond", the contrasting motto verbum meum pactum, in this context, means "The words that I write on a page are my bond"; and, as a consequence, they are warning their customers that "Nothing that I say can be trusted". The start of World War Two: The Exchange is closed for 6 days and reopens on 7 September of 1939. The floor of the House closes for only one more day, in 1945 due to damage from a V2 rocket – trading then continues in the basement. The former Stock Exchange Tower, based in Thread needle Street/Old Broad Street was opened by Queen Elizabeth II in 1972 and housed the Trading Floor where traders would traditionally meet to conduct business. In 1973 the first female members admitted to the market. The 11 British and Irish regional exchanges amalgamate with the London exchange. With the advent of the Big Bang on 27 October 1986, which deregulated many of the Stock Exchange's activities it eliminated fixed commissions on security trades and allowed securities firms to act as brokers and dealers. It also enabled an increased use of computerised systems that allowed dealing rooms to take precedence over face to face trading.