Stock Exchanges: Recent Developments

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Stock Exchanges Recent Developments

• International University College of Turin
• MSc CLEF
• International Securities Regulations
• Shahboz Fattaev

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Stock Exchanges

• A Stock Exchange - is a corporation or mutual
  organization which provides trading facilities
  for stock brokers and traders, to trade stocks
  and other securities.
• The securities traded on a Stock Exchange (SE)
  include
• Shares issued by companies
• Unit trusts
• And other pooled investment products and bonds.

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• There are primary and secondary stock markets
• Primary market the initial offering of stocks
  and bonds to investors
• Company ---? Investor
• Secondary market subsequent trading is done
• Investor ---? Investor

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• A stock market is a private or public market for
  the trading of company stock and derivatives of
  company stock.
• The size of the world stock market
• 36.6 trillion USD as October, 2008

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The biggest SEs in the world (October, 2007)
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New York Stock Exchange (NYSE)

• Established May 17, 1792
• Market capitalization 10.1 trillion USD
  (October, 2008)
• Listed companies 2773
• Indexes
• NYSE Composite
• Dow Jones Industrial Average (DJIA)

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NYSE Composite Index

• Over 2000 stocks
• - over 1600 from US corporations
• - over 360 from foreign listings
• - 61 of the total market capitalization of the
  world
• June 1, 2007 NYSE Composite closes above 10000
• September 29, 2008 8 decrease
• November 20, 2008 4650 points (min)

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NYSE Composite Index
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Dow Jones

• Stock prices of 30 largest companies in the US
• July 19, 2007 exceeds 14000
• October 9, 2007 closes at a peak of 14164.53
• September 15, 2008 Ugly Monday loses 500
  points
• September 29, 2008 Dark Monday drop 777.68
  points
• October 13, 2008 Manic Monday gain 936.42
  points (11 biggest since 1933)
• October 15, 2008 loss 7.87
• October 28, 2008 Terrific Tuesday gain 10

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Dow Jones
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• In 2007 NYSE announces its merger with American
  Stock Exchange
• In April 4, 2007 NYSE merged with the fully
  electronic stock exchange Euronext

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Euronext

• Formed September 22, 2000
• Amsterdam Stock Exchange
• Brussels Stock Exchange
• Paris Bourse
• Euronext Paris
• Belgium
• France
• Netherlands
• Luxembourg
• UK
• Market capitalization 2.9 trillion USD (January
  31, 2006)
• December, 2001 Euronext acquired the shares of
  the London International
  Financial Futures and Options Exchange
• In 2002 Euronext merged with Bolsa de Valores de
  Lisboa (Portuguese Stock Exchange)

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Euronext merger with NYSE

• NYSE offer 8 billion euro (US 10.2 billion)
• Deutsche Borse offer 8.6 billion euro (US 11
  billion)
• NYSE Group merger agreement with Euronext
• NYSE Euronext
• Headquarter New York City
• In Europe Paris
• November 15, 2006 Deutsche Borse dropped out
  bidding for Euronext
• December 19, 2006 98.2 vote NYSE, 1.8 vote
  Deutsche Borse
• Merger completed April 4, 2007 NYSE Euronext
• November 25, 2008 Deutsche Borse NYSE Euronext
  merger talks

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Tokyo Stock Exchange

• Market capitalization 4.3 trillion USD (December
  31, 2007)
• Listed companies 2414
• Stocks listed on the TSE are separated into
• The 1st section (for large companies)
• The 2nd section (for mid-sized companies)
• The Mothers section (for high-growth
• startup companies)

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• May 9, 2000
• - TSE switched to electronic trading for all
  transactions
• December 8, 2005
• 610 000 shares 1 Yen
• 1 share 610 000 Yen
• Net loss 347 million USD

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Main Indexes

• Nikkei 225 Index of companies selected by the
  Nihon Keizai Shimbun Japans largest business
  newspaper
• - December 29, 1989 highest point 38957.44
• - October 27, 2008 lowest point 7162.90
• Topix Index based on the share price of 1st
  section companies

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Nikkei 225 Index
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Topix Index

• TOPIX TOkyo stock Price IndeX
• November 10, 2008
• 1713 listed companies in the 1st section
• Market value 294 733 billion Yen
• Trading volume 212 million shares

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Topix
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London Stock Exchange

• Established in 1801
• Listed companies 3135 (November, 2008)
• Main Index The FTSE 100 Index
• Share index of the 100 most highly capitalized UK
  companies
• Began in January 3, 1984 with base value 1000
• The highest December 30, 1999 6950.6
• The lowest November 21, 2008 3781
• FTSE 100 represent 81 of the whole LSE

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FTSE 100
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NASDAQ takeover attempt of LSE

• In 2005 1.6 GBP billion takeover from Macquarie
  Bank
• NASDAQ valued LSE 2.4 GBP billion
• NASDAQ purchased 35.4 million shares at 11.75 GBP
  per share LSEs shareholders
• November, 2006 NASDAQ paid 12.43 GBP per share
  on its existing shares
• December, 2006 NASDAQ revised its offer
• 50 1 share
• August, 2007 NASDAQ announced abandoning its
  plan to take over LSE
• September, 2007 NASDAQ sold the majority of its
  shares to Borse Dubai

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• February 9, 2009
• US stock futures fell
• NYSE Euronext dropped 6.5 after reporting a
  fourth quarter net loss
• Futures on the SP 500 decreased 0.7
• DJIA futures fell 0.6
• NASDAQ 100 Index futures slipped 0.4
• European stocks fluctuated, while Asian shares
  retreated
• The amplitude of the work needed to get out of
  the crisis is so great, and we wonder if the
  financial assistance will be enough, Emmanuel
  Soupre

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THE END