The financial market is defined as a market that provides a platform for the trade, sale and purchase of securities. These securities include currency, bonds and stocks. The financial markets are further classified into currency markets, bond markets and stock markets. Shares can be defined as the instruments of ownership that are issued to the capital owners. When a person purchases a share in an organization, he becomes a shareholder or a participant of the company (Nangalia & Kothari, 2017). People purchase the stocks of the organizations to secure a part of the profits made by the company or in the hopes of an increase in the prices of the stocks because of higher demand resulting from the growth of the organization. The stocks of the organization are bought and sold by the people in the market in a regulated manner. The stock market is the primary market where the trading of the stocks takes place (Capital Market Authority, 2017). The organizations issue their stocks in this market after the organization is established. This report is prepared to provide an introduction to the stock markets and their significance in the economy. It provides the readers with an overview of the top 10 stock markets of the world, the Australian Stock Exchange and an overview of three organizations belonging to the energy and resources industry listed on the Australian Stock Exchange (Morck, et al., 1990).
Overview of the global share markets
The top 10 share markets of the world ranked on the basis of their market capitalisation value are:
New York Stock Exchange
With the total market capitalisation value of $23.21 trillion, the New York Stock Exchange has consistently maintained the position of the largest stock exchange of the world since the end of the First World War. There are about 2400 organizations listed in this share market and NYSE alone accounts for about 40% of the total global stock market capitalisation.
NASDAQ
The Nasdaq Stock Market is another stock exchange based in New York City. Founded in the year 1971, NASDAQ has a market capitalisation value of $11.22 trillion and has the largest technology organizations in the world listed there.
Japan Exchange Group
With the market capitalisation value of $5.61 trillion, Japan Exchange Group is the third-largest share market in the world. This stock exchange has about 2300 listed organizations and is based in Tokyo, Japan (Shukla, 2019).
Shanghai Stock Exchange
The Shanghai Stock Exchange is the largest share market in China having the total market capitalisation value of $5.01 trillion. Although this stock market was first found in the year 1866, its operations suspended in the year 1849 because of the Chinese revolution. The Shanghai Stock Exchange was founded again in the year 1990 in its current form.
Hong Kong Stock Exchange
The Hong Kong Stock Exchange was established in Hong Kong in the year 1891. It has about 2,000 organizations listed on the stock exchange and about half of these organizations are from China. The total market capitalisation value of the Hong Kong Stock Exchange is $4.31 trillion.
Euronext
The Euronext is a pan European share market having its presence in Portugal, Ireland, France and Belgium. The stocks listed on this share market are traded in euros and it has a total market capitalisation value of $4.27 trillion. The headquarters of Euronext is located in Amsterdam and it has more than 1300 listed organizations (Statista, 2019).
London Stock Exchange
Founded in the year 1698, the London Stock Exchange has a market capitalisation value of $3.97 trillion and has more than 3000 listed companies. Till the end of World War I, London Stock Exchange the largest stock market of the world.
Shenzhen Stock Exchange
The Shenzhen Stock Exchange along with the Shanghai Stock Exchange are the only two independently operating share market in China. The Shenzhen Stock Exchange has a market capitalisation value of $3.36 trillion and shares are traded in Yuan in this stock exchange.
Toronto Stock Exchange
Having more than 2200 organizations listed on this share market, The Toronto Stock Exchange has a market capitalisation value of $2.22. The Toronto Stock Exchange is managed by the TMX Group and is based in Toronto, Canada.
Bombay Stock Exchange
Located in Mumbai, India, the Bombay Stock Exchange has more than 5700 listed organizations. The market capitalisation value of the Bombay Stock Exchange is $2.18 and it was the first share market in Asia founded in the year 1875 (EYGM Limited, 2009).
Overview of Australian stock exchange
The Australian Securities Exchange (ASX) is the primary stock exchange of Australia. The origins of this exchange go back to the 1800s when there were six different stock exchanges established in Melbourne, Hobart, Sydney, Adelaide, Perth and Brisbane. All these independent stock exchanges were amalgamated in the year 1987 to form the Australian Stock Exchange. The current market capitalization value of ASX is AUD 1.98 trillion and it is headquartered in Sydney, New South Wales (Market Index, 2019). As of December 2019, ASX has 2,223 listed organizations belonging to different industries ranging from Automobiles & Components, banking and financial services, consumer goods, professional services, energy, food and beverages, tobacco and healthcare. The responsibilities of ASX include the review of applications by the organizations willing to be listed on the stock exchange, supervision of the organizations and their practices, supervising the market by issuing the stocks of the listed companies and the purchase of these stocks by the stockbrokers and maintaining the records of ownership of the shares for the organizations (ASX Schools, 2017).
ASX provides the organizations in Australia with an opportunity to raise the capital by issuing securities in the form of shares to the general public. Once an organization is listed on the Australian securities exchange, it can issue these securities and investors can trade the securities in the market. The computerized and automated system provided by ASX enables the legal ownership and transfer of the securities between the buyers and sellers in the market along with the exchange of money for these securities. The organization is responsible for the development of the listing rules that need to be followed by the listed companies guiding the organizations on how the buyers and sellers should be treated and how the brokers should behave in the market for maintaining the integrity and trust of all the people taking part in this exchange.
Overview of the three selected organizations
For carrying out the industry and organization analysis, the energy sector is selected for this report. There are 173 energy organizations listed on the Australian securities exchange. The overview of the three organizations is presented in this report. These include Elixir Energy Ltd, Vintage Energy, Australia and Vimy Resources Ltd.
Elixir Energy Ltd
Elixir Energy Ltd is listed on the ASX by the code EXR. Operating in the energy sector, the organization carries out the exploration and development of oil and gas in Australia and Mongolia. The current share price for the organization is AUD 0.042 and the market capitalisation value of this energy company is AUD 21.54 million. The price-performance of the shares of Elixir Energy for the past five years is presented in the chart below.
(ASX Limited, 2019)
Vintage Energy Ltd
Vintage Energy Ltd has a market capitalisation value of AUD 42.65 million and the present price of one share of the organization is AUD 0.16. It was registered as a proprietary limited company on 5th November of the year 2015. It carries out the acquisition, exploration and development of the energy assets within and outside Australia. There are 266.59 million shares of Vintage Energy issued at ASX (Vintage Energy Ltd, 2019). It is a relatively new organization that was listed on the ASX on 17 September 2018. The past performance of the share price for the entity is presented in the table below.
(ASX Limited, 2016)
Vimy Resources Ltd
Vimy Resources Ltd is another organization operating in the energy sector in Australia. The organization is responsible for the exploration and evaluation of the energy resources within and outside Australia and is currently dedicated to the Mulga Rock Project. This project is located in Western Australia and includes the development of the uranium resources that are currently and developed in the Kalgoorlie region. The market capitalisation value of Vimy Resources Ltd at present is AUD 30.32 million and the present price of one share of the company is AUD 0.048. The organization has issued 618.85 million shares and the performance of the share prices of the company for the last five years is presented in the table below.
(ASX Group, 2019)
Conclusion
In conclusion, this report presents an overview of the stock markets and ranks the global share markets on the basis of their market capitalisation value. It also provides a brief history and background of ASX and the overview of three organizations Elixir Energy Ltd, Vintage Energy, Australia and Vimy Resources Ltd belonging to the energy sector of Australia. All these organizations are listed on the Australian securities exchange and the report presents information about their share price and its performance for the last 5 years.
References
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Available at: https://www.asx.com.au/asx/share-price-research/company/VMY
ASX Limited, 2016. Vintage Energy Ltd: Share price research. [Online]
Available at: https://www.asx.com.au/asx/share-price-research/company/VEN
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Available at: https://www.marketindex.com.au/asx-listed-companies
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Nangalia, R. & Kothari, S., 2017. Basics Of Stock Market, Available at: http://www.flame.edu.in/pdfs/fil/presentations/FIL_Stock%20Market.pdf
Shukla, V., 2019. Top 10 Largest Stock Exchanges In The World By Market Capitalization, Available at: https://www.valuewalk.com/2019/02/top-10-largest-stock-exchanges/
Statista, 2019. Largest stock exchange operators worldwide as of May 2019, by market capitalization of listed companies, Available at: https://www.statista.com/statistics/270126/largest-stock-exchange-operators-by-market-capitalization-of-listed-companies/
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Available at: https://www.vintageenergy.com.au/history.html
