Stock Markets Analysis

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Part
01

Stock Market Analysis

Data on the average daily volume across all stock markets globally, total number of IPOs annually, the sum of average daily volume and the sum of all average number of IPOs for all 10 exchanges, trading volume for each stock market as a % of global trading volume, trading volume for each stock market as a % of cumulative trading volume of all the top 10 stock markets, average number of IPOs as a % of global IPOs, IPOs for each market as a % of cumulative IPOs across the top 10 stock markets, market cap for each stock market, and market capitalization of each market as a % of total market cap across the top 10 markets, has been compiled in the attached spreadsheet. The calculations, where needed, have been outlined below.

Average daily volume across all stock markets globally

According to Organization for Economic Co-operation and Development (OECD) data, the average monthly trade volume for the top 20 stock markets amounts to $6.6 trillion. For easier navigation, the screenshot of the OECD source was compiled in the attached document. According to the golden economic 80/20 rule, also known as the Pareto principle, we assume that the top twenty exchanges contribute 80% of the volume of the overall trade. This leads to the remaining exchanges in the world contributing an additional $1.6 trillion in monthly trade volume, totaling the monthly trade volume to $8.2 trillion.
This is calculated as follows:
  • If $6.6 trillion = 80% of overall volume: $6.6 trillion / 80 = 0.082 trillion equals 1% of overall volume
  • 0.082 trillion x 0.2 = $1.6 trillion (or 20% of the overall volume)
  • $6.6 trillion + $1.6 trillion = $8.2 trillion

As stock markets do not work on the weekends, we can assume that the total amount of trading days in a month is 20 (with 5 weeks, there is 10 days that count as weekends). Considering the above is the monthly volume, we calculate the daily volume as follows:
$8.2 trillion / 20 = $0.41 trillion
The daily trading volume globally is $0.41 trillion or $410 billion.

According to the World Federation of Exchanges, the yearly volume for all stock markets in the world was $97,318,705,000,000 for 2018. In 2018, there were 252 trading days which translates to:
$97,318,705,000,000 / 252 = $386,185,337,301 daily
The daily trading volume globally, according to WFE, is $386,185,337,301 or $386 billion. Therefore, this confirms our estimate above which is a calculation provided for 2019.

Trading volume as a % of global trading volume

The trading volume for individual countries was provided in the spreadsheet as follows:
  • New York Stock Exchange: $169,000,000,000
  • NASDAQ: $13,136,639,000
  • Tokyo Stock Exchange: $3,900,000,000
  • Shanghai Stock Exchange: $41,34­­2,000,000
  • Hong Kong Stock Exchange: $104,200,000,000
  • Euronext: $18,141,000,000
  • London Stock Exchange: $6,390,448,956
  • Shenzhen Stock Exchange: $10,000,000,000
  • Toronto Stock Exchange: $36,441,991
  • Bombay Stock Exchange: $21,000,000,000

As calculated above, the daily trading volume globally is $410,000,000,000.

In order to calculate each stock market's trading volume as % of the global trading volume, we divided the country's trading volume by the total global trading volume:
  • New York Stock Exchange: $169,000,000,000 / $410,000,000,000 = 41,21%
  • NASDAQ: $13,136,639,000 / $410,000,000,000 = 3.2%
  • Tokyo Stock Exchange: $3,900,000,000 / $410,000,000,000 = 1%
  • Shanghai Stock Exchange: $41,34­­2,000,000 / $410,000,000,000 = 10,1%
  • Hong Kong Stock Exchange: $104,200,000,000 / $410,000,000,000 = 25,41%
  • Euronext: $18,141,000,000 / $410,000,000,000 = 4,4%
  • London Stock Exchange: $6,390,448,956 / $410,000,000,000 = 1,6%
  • Shenzhen Stock Exchange: $10,000,000,000 / $410,000,000,000 = 2,4%
  • Toronto Stock Exchange: $36,441,991 / $410,000,000,000 = 0,09%
  • Bombay Stock Exchange: $21,000,000,000 / $410,000,000,000 = 5,1%

Trading volume as a % of cumulative trading volume of all the top 10 markets

The total trading volume of the top 10 stock exchanges amounts to $387,146,529,947. This amount is shown in Row 14, Column D, and has been calculated as follows:
$169,000,000,000 + $13,136,639,000 + $3,900,000,000 + $41,34­­2,000,000 + $104,200,000,000 + $18,141,000,000 + $6,390,448,956 + $10,000,000,000 + $36,441,991 + $21,000,000,000 = $387,146,529,947.

Each stock market's trading volume shown as a % of cumulative trading volume of all the top 10 markets has been calculated as follows:
  • New York Stock Exchange: $169,000,000,000 / $387,146,529,947 = 43,65%
  • NASDAQ: $13,136,639,000 / $387,146,529,947 = 3,4
  • Tokyo Stock Exchange: $3,900,000,000 / $387,146,529,947 = 1%
  • Shanghai Stock Exchange: $41,34­­2,000,000 / $387,146,529,947 = 10,7%
  • Hong Kong Stock Exchange: $104,200,000,000 / $387,146,529,947 = 26,9%
  • Euronext: $18,141,000,000 / $387,146,529,947 = 4,7%
  • London Stock Exchange: $6,390,448,956 / $387,146,529,947 = 1,7%
  • Shenzhen Stock Exchange: $10,000,000,000 / $387,146,529,947 = 2,6%
  • Toronto Stock Exchange: $36,441,991 / $387,146,529,947 = 0,1%
  • Bombay Stock Exchange: $21,000,000,000 / $387,146,529,947 = 5,4%

IPOs as a % of global IPOs

The average total number of IPOs annually for all stock markets globally is 1,400.

The number of IPOs for individual countries was provided in the spreadsheet as follows:
  • New York Stock Exchange: 65
  • NASDAQ: 120
  • Tokyo Stock Exchange: 95
  • Shanghai Stock Exchange: 140
  • Hong Kong Stock Exchange: 100
  • Euronext: 50
  • London Stock Exchange: 73
  • Shenzhen Stock Exchange: 135
  • Toronto Stock Exchange: 119
  • Bombay Stock Exchange: 165

Each stock market's IPO number shown as a % of cumulative number of global IPOs has been calculated as follows:
  • New York Stock Exchange: 65 / 1,400 = 4,64
    • NASDAQ: 120 / 1,400 = 8,6%
    • Tokyo Stock Exchange: 95 / 1,400 = 6,8%
    • Shanghai Stock Exchange: 140 / 1,400 = 10%
    • Hong Kong Stock Exchange: 100 / 1,400 = 7,1%
    • Euronext: 50 / 1,400 = 3,6%
    • London Stock Exchange: 73 / 1,400 = 5,2%
    • Shenzhen Stock Exchange: 135 / 1,400 = 9,6%
    • Toronto Stock Exchange: 119 / 1,400 = 8,5%
    • Bombay Stock Exchange: 165 / 1,400 = 11,8%

    IPOs as a % of cumulative IPOs across the top 10

    The top ten stock exchanges make up for 75,84% of the total global IPOs. This amount is shown in Row 14, Column H, and has been calculated as follows:
    4,64% + 8,6% + 6,8% + 10,0% + 7,1% + 3,6% + 5,2% + 9,6% + 8,5% + 11,8% = 75,84%.

    Each stock market's IPO number shown as a % of cumulative number of the top 10 stock market IPO number has been calculated as follows:
    • New York Stock Exchange: 4,64% / 75,84% = 6,1%
    • NASDAQ: 8,6% / 75,84% = 11,3%
    • Tokyo Stock Exchange: 6,8% / 75,84% = 9,0%
    • Shanghai Stock Exchange: 10,0% / 75,84% = 13,19%
    • Hong Kong Stock Exchange: 7,1% / 75,84% = 9,4%
    • Euronext: 3,6% / 75,84% = 4,7%
    • London Stock Exchange: 5,2% / 75,84% = 6,9%
    • Shenzhen Stock Exchange: 9,6% / 75,84% = 12,66%
    • Toronto Stock Exchange: 8,5% / 75,84% = 11,21%
    • Bombay Stock Exchange: 11,8% / 75,84% = 15,56%

    Market capitalization as a % of total market cap across the top 10

    In order to calculate the market capitalization as a % of total market cap across the top 10 stock markets, we first identified the market capitalization for each of the markets:
  • New York Stock Exchange: $28,528,761,000,000

  • The total market cap for the top 10 stock markets can be calculated as follows:
    $28,528,761,000,000 + $14,970,000,000,000 + $5,610,000,000,000 + $5,010,000,000,000 + $4,310,000,000,000 + $4,000,000,000,000 + $3,900,000,000,000 + $3,360,000,000,000 + $2,200,000,000,000 + $2,180,000,000,000 = $74,068,761,000,000

    We calculated each market's capitalization as a % of total market cap across the top 10 stock markets as follows:
  • New York Stock Exchange: $28,528,761,000,000 / $74,068,761,000,000 = 38,51%
    • NASDAQ: $14,970,000,000,000 / $74,068,761,000,000 = 20,22%
    • Tokyo Stock Exchange: $5,610,000,000,000 / $74,068,761,000,000 = 7,57%
    • Shanghai Stock Exchange: $5,010,000,000,000 / $74,068,761,000,000 = 6,8%
    • Hong Kong Stock Exchange: $4,310,000,000,000 / $74,068,761,000,000 = 5,82%
    • Euronext: $4,000,000,000,000 / $74,068,761,000,000 = 5,4%
    • London Stock Exchange: $3,970,000,000,000 / $74,068,761,000,000 = 5,3%
    • Shenzhen Stock Exchange: $3,360,000,000,000 / $74,068,761,000,000 = 4,5%
    • Toronto Stock Exchange: $2,200,000,000,000 / $74,068,761,000,000 = 3%
    • Bombay Stock Exchange: $2,180,000,000,000 / $74,068,761,000,000 = 2,9%
    Sources
    Sources