In the last few centuries, stock markets have become one of the most important constituents of the world economy. A stock exchange is a regulated marketplace where different financial securities such as stocks, bonds, and warrants are bought and sold. Here we are going to trace their origins and look at the top 10 oldest stock exchanges in the world.
Which were the oldest stock exchanges?
The stock market systems didn’t start facilitating the purchase and sale of stocks from inception. In fact, the first exchanges didn’t trade even a single stock for centuries. Back in the 11th century, French businessmen managed and traded agricultural debts across the country on behalf of banks. The merchants of Venice began trading government securities in the 13th century.
As the decades went by, moneylenders across Europe traded debts among one another. One moneylender could exchange their high-risk, high-interest loan for a low-risk loan with another moneylender. They would also trade in government debts. These developments laid the groundwork for future stock market systems.
The first proper exchange arrived in Antwerp, Belgium in 1531. Brokers, moneylenders, and other business people would gather to issue and trade the government, business, and individual debts. But Antwerp and other early exchanges had no real stocks. The first exchange that traded real stocks was established several decades later. People would gather in coffee shops or under the trees to trade stocks, which were handwritten on sheets of paper at the time.
These are the top 10 oldest stock exchanges in the world:
10- Australian Securities Exchange, 1878
The Australian Securities Exchange in Sydney, Australia is one of the world’s top 20 largest exchanges. It has more than 2,250 listed companies. The ASX’s origin dates back to 1878. In its early days, trading was conducted through a call system where an employee would call the names of individual companies and brokers would bid.
9- Toronto Stock Exchange, 1861
8- Madrid Stock Exchange, 1831
Bolsa de Madrid was founded in 1831 in the capital city of Spain. It is currently housed in a historic 19th-century building. It switched to an all-electronic trading for fixed income securities in 1993. It has about 1,500 listed companies with a combined market capitalization of 1.27 trillion euros.
7- Frankfurt Stock Exchange, 1820
It has a market capitalization of about $1.8 trillion, making it one of the world’s largest stock exchanges. Though it was formally established in 1820, it has a much longer history. Its origins can be traced back to the medieval trade fairs in the 11th century. A bourse was established in 1585 when the trade fair merchants decided to set up fixed currency exchange rates.
6- New York Stock Exchange, 1817
The NYSE is the largest stock exchange in the world with a market capitalization of $22 trillion. Some of the world’s largest corporations are listed here. Unlike London Stock Exchange and many other exchanges, the NYSE began trading stocks from the first day of its launch in 1817. Due to its strategic location and little domestic competition, it quickly became the most influentia exchange in the United States. However, the NYSE has been facing tough competition from NASDAQ, which was founded in New York City in 1971.
5- Milan Stock Exchange, 1808
Founded in 1808, Borsa Italiana is the only exchange in Italy. It is currently owned and operated by the London Stock Exchange Group. Just like the Wall Street has the iconic charging-bull statue, the Milan Stock Exchange has a giant marble middle finger. The 36-foot middle finger sculpture was created by Italian artist Maurizio Cattelan.
4- London Stock Exchange, 1801
The LSE is one of the world’s largest and oldest exchanges. It was founded in 1801 but companies were not allowed to issue shares until 1825, which hurt its growth in the initial years. Today, it has more than 3,000 listed companies with a combined market value of $3.76 trillion. It was the world’s largest exchange until the end of World War I, when it was dethroned by the NYSE.
3- Philadelphia Stock Exchange, 1790
Many believe the NYSE to be the first stock exchange in the United States, but that title is held by the Philadelphia Stock Exchange. Founded in 1790, it was originally called the Board of Brokers of Philadelphia. Its name was changed to the Philadelphia Stock Exchange in 1875. In 2007, it was acquired by the NASDAQ OMX Group for $652 million.
2- Paris Stock Exchange, 1724
The Paris Bourse was founded in 1724. Today, it has more than 1,000 listed companies with a combined market capitalization of $2.9 trillion. It was merged in September 2000 with the Amsterdam, Brussels, and Lisbon exchanges to form Euronext. It is now known as Euronext Paris.
1- Amsterdam Stock Exchange, 1602
According to Guinness World Records, it is the oldest in the world. Currently known as Euronext Amsterdam, it was founded in 1602 by the Dutch East India Company to deal in its printed stocks and bonds. It was the first exchange to formally start trading in stocks. The Dutch East India Company holds the crown of the world’s first publicly-traded company. Each investor was entitled to part of its profits. The Dutch East India Company paid an average dividend of 16% per year between 1602 and 1650.