Chapter 19STOCK MARKETS AROUND THE WORLD

OverviewMultiple listings on national marketsTrading costs in international stock marketsGlobal Diversificationcorrelation of world equity markets

United KingdomLondon Stock Exchange (LSE)ordinary shares of local and foreign firmsprivate fixed interest securitiesBritish government securitiesOperationsOTC marketReformsBig Bang

GermanyFrankfurt Stock Exchange (FSE)Market Segmentsofficial marketregulated market Neuer MarketExchange Electronic Trading (Xetra)

JapanTokyo Stock Exchange (TSE)first sectionsecond sectionOperationscontinuous auction marketOTC marketReformsfinancial big bang

Chinese Stock MarketA sharesrestricted to Chinese investorsdenominated in Chinese yuanlimited to state-owned companiesHong KongH sharesred chipsB sharesreserved for foreign investorsShanghai B-shares are quoted in U.S. dollarsShenzen B-shares are quoted in Hong Kong dollars

Recent European Stock Market ReorganizationsLondon Stock ExchangeDeutsche BrseEuronextOther European Stock Market ActivitiesNASDAQNYSE

New European ExchangesMarkets for Emerging CompaniesNeuer Markt in FrankfurtNouveau Marche in ParisAlternative Investment Market in LondonEasdaq in Brussels

New Japanese ExchangesNASDAQ Japanauction marketsmall issues are traded through the market making systemlarge issues are traded by the auction method

Ownership and Control of National Stock ExchangesPrivately Owned MarketsUnited States, United Kingdom, Hong Kong, Canada, Japan, AustraliaPublic InstitutionsFrance, Spain, Italy, BelgiumBanksSwitzerland, Austria

Trading Procedures and ComputerizationContinuous MarketCall MarketComputerized Trading

Dealers in Major MarketsSpecialist SystemCompetitive Dealer SystemComputerization

Stock Market IndexesJapanTokyo Stock Price Index (TOPIX)Nikkei 225 Stock AverageUnited KingdomFinancial Times-Stock Exchange 100 (FTSE 100)

GermanyDeutscher Aktienindex (DAX)FranceCAC 40OthersHang Seng Index Morgan Stanley EAFE Index

Global Depository ReceiptGlobal Depository Receipt (GDR)Bank-issued title to shares of stock traded in a foreign country.American Depository Receipt (ADR)Tradable right to a foreign share held in trust by a U.S. financial institution that issues the ADR.Depository Receiptcombination of GDRs and ADRs

American Depository ReceiptTypes:nonsponsored sponsoredTrading LocationNYSEASEOTC marketAdvantagestrade stocks on U.S. exchangespayments made and received are in U.S. dollarsavoid some country-specific taxes