World History of Stock Exchange
London Stock Exchange debuted in 1773, but was crippled by laws that restricted shares. The New York Stock Exchange, or NYSE, formed 19 years later, and has traded in stocks since its inception. The NYSE rose in tandem with the American economy and became the world’s most important exchange until the Nasdaq came along in 1971. The Nasdaq is a network of computers that trade electronically. It has made trading more efficient and reduced bid-ask spreads. The NYSE responded to Nasdaq’s rise by listing itself and merging with Euronext. It remains the largest stock exchange in the world, with a market capitalization bigger than Tokyo, London and the Nasdaq combined. For more information, see The Birth of Stock Exchanges. Formed by brokers under the spreading boughs of a buttonwood tree, the New York Stock Exchange made its home on Wall Street. The exchange’s location, more than anything else, led to the dominance that the NYSE quickly attained. It was in the heart of all the business and trade coming to and going from the United States, as well as the domestic base for most banks and large corporations. By setting listing requirements and demanding fees, the New York Stock Exchange became a very wealthy institution.
Indian History of Stock Market
The stock market in India dates back to the 18th century when the securities of the East India Company were traded in Bombay and Kolkata. Indian stock market is the oldest among all in Asia. Today BSE and NSE are the two most advanced and best stock exchanges of India. In this article we will take you through the history of BSE and NSE.
- Bombay Stock Exchange
Bombay Stock Exchange, the first stock exchange of the country was established as early as in 1875, predating the Tokyo Stock Exchange by three years. It was started with stock brokers trading under the banyan tree opposite the town hall of Bombay. This group of stock brokers formed an association called The Native Share and Stock Brokers Association and in 1875 it became a formal stock market. In 1928, BSE was shifted to Dalai Street. It is the first stock market in India which got permanent recognition from government of India under the Securities Contract Regulation Act 1956. In 1955, BSE became screen based trading system.
- National Stock Exchange
NSE was established in 1992 as the first demutualized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country. National Stock Exchange (NSE) is located at Mumbai, India. It is the 11th largest stock exchange in the world by market capitalization. NSE is mutually owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India. But its ownership and management operate as a separate entity. There are at least 2 foreign investors “NYSE Euronext” and “Goldman Sachs” who have taken a stake in the NSE. It is the second fastest growing exchange in the world with a recorded growth of 16.6%. NSE was also instrumental in creating the National Securities Depository Limited (NSDL) which allows investors to securely hold and transfer their shares and bonds electronically.