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European Stock Markets and Recent Developments
By : Suchaya Hongstong
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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
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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.
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Organizations and Structures of Major European stock market
Three distinguishable types
of organization
- Privately owned and self
regulated market
- State controlled market
- Semi-independent market
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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
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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
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Major Stock Market Operations and Activities
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London Stock Exchange (LSE)
• Started in the 17th Century as London coffee houses and became the city most important financial institution.
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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
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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
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Euronext
• Established in 2000 by a merger of Amsterdam, Bressels and Paris exchanges
• Offer financial instruments, trading in securities and derivatives
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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)
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Thank you