US Capital Markets

Appendix: The European Stock Market

There are approximately 30 stock exchanges that operate in Europe.  These range from the London exchange that lists about 2,800 companies, to Iceland’s where only sixty firms are traded.

Over the past few years, the European exchanges have gone through a period of development and modernization.  Today, many of them are at a technological level equal to that of the US markets.  With the advance of the Euro, many of the divisions between the different exchanges have fallen away, and there are now attempts to create a centralized exchange system that will cover all of Europe.

We will briefly cover the major exchanges in Europe and discuss some of the leading stock indices.

The London Stock Exchange and the FTSE    1

The London Stock Exchange (LSE) is the largest in Europe. About 2,700 companies are listed there, and as of July 2010, they have a total market cap of $2.4 trillion.

Here are a few examples of some well known companies that are traded in London:

Company Sector
Rolls Royce Engines
British Airways Airline
Reuters Group Media
Marks & Spencer Retali

The leading index in the British stock market is the FTSE 100 (pronounced “footsie”). The index was developed by the FTSE Corporation in 1,984. It is comprised of the 100 companies with the largest market cap that are traded at the LSE. The index tries to represent the entire British stock market.

The German Exchange and the DAX   1

The German stock exchange – Deutsche Börse – is a large, central, European exchange.  As of August 2010, approximately 758 firms had their stock traded there, and their total market cap was 1.13 trillion dollars.

Here are a few examples of some well known companies that are traded at the German exchange:

Company Sector
Siemens Electronics
BMW Automobile
Daimier Chrysler Automobile
Allianz Insurance

The leading index, the Dax, is made up of 30 large companies from a variety of business sectors.  It tries to present a picture of the entire German stock market.

The Euronext Exchange and the CAC    1

The Euronext exchange was created from the merger of three separate markets:  The Paris, Amsterdam and Brussels exchanges.  As of 2007, approximately 1,400 companies were traded there and they had a combined market cap of $2.26 trillion (as of May 2010).

Here are some large companies that are traded in the Euronext:

Company Sector
Vivendi Universal Media
Air France Airliner
Club Med Hotels
Eur Disney entertainment

The leading index, the CAC 40, is made up of 40, large, French companies.

 


The Italian Exchange and the MIB   1

As of January 2010, The Italian stock exchange – Borsa Italiana – listed about 295 companies with a total market cap of   

507 billion dollars.

Some leading companies that are traded on the Italian exchange:

Company Sector
Benetton Fashion
Bulgari Fashion
Alitalia Airliner
Pirelli Chemicals

The MIB 30 includes the 30 largest companies on the market. It represents the Italian stock market.

Europe-Wide Stock Indices

In recent years, a number of different companies have tried to create indices that would represent the entire European stock market. The most significant of these are the STOXX indices that were developed by Dow Jones & Co.

  • The Dow Jones STOXX 50 includes stocks from fifty large companies across Europe.  It represents the entire European stock market.

The Dow Jones Euro STOXX 50 includes stocks from fifty companies from countries that adopted the Euro.  This index tries to give a picture of the stock market in the Euro Zone

Appendix: The European Stock Market561  Appendix:  The European Stock Market