Monday, 18 April 2011 - 20:00Sharenet is pleased to announce the launch of our new publication, The Sharenet Daily. We have built on the success of our Daily Equity Report, while adding more content and helpful information. The result is a publication that gives readers a quick, easy to read and informative synopsis of market activity, company results and news on the JSE for the day, as well as an overview of what transpired on important overseas markets.
The Sharenet Daily includes helpful charts that give a graphical impression of events, and our news content is sourced from a number of contributors, including Reuters. In addition, Sharenet's popular price information is available in our Spot Price format which provides a snapshot of the JSE and world indices, currencies and commodities.
All the JSE trading statistics; major movers; latest dividends; upcoming AGM dates and more are provided to insure that you keep abreast of market developments. The Sharenet Daily is published at 8pm each day on the website and also distributed via email for your convenience. As always, we welcome your comments, feedback and suggestions at email@example.com
Stock markets as businesses and their indices
Over the years there have been a plethora of stock market indices that have been formulated, published and indeed even marketed. There are many uses for these indices, including benchmarking of a portfolio’s performance against an average, having a starting point from which to construct the portfolio and in the case of ETF’s (exchange traded funds) even creating a product in which investors can invest.
Over the years numerous indices have been created, each one slightly different from the next. World indices include companies from around the world, usually with a weighting to the relative sizes of the exchanges in each of the countries represented.
Because most major countries have at least one exchange, which lists the largest companies trading in that area, the most common indices are the country specific indices. Included here would be the likes of :
• the FTSE/JSE Top 40. This index commenced in 2002 and includes the top 40 companies on the JSE by market capitalisation.
• The FTSE 100. This index was developed with a base of 1000 as at January 1984. It is a capitalisation weighted index of the 100 most highly capitalised companies traded on the London Stock Exchange.
• The DAX. This is an index of the 30 major German companies trading on the Frankfurt Stock Exchange.
• The Nikkei 225, or more commonly called the Nikkei is a market index for the Tokyo Stock Exchange calculated on a price weighted basis since 1950.
• S&P500 is a free float market capitalisation index published since 1957 of the prices of 500 large cap shares which are actively traded in the United States on either the New York Stock Exchange or the Nasdaq.
Stock exchanges themselves are substantial businesses. Locally the JSE, which was previously run as a mutual business, incorporated as the JSE Ltd and listed its business on its own exchange. It currently has a market capitalisation of R5,6 billion.
Globally we are seeing merger activity and attempts to do major cross border mergers in an attempt to crate bigger and bigger global exchanges.
The London Stock Exchange (LSE) is currently proposing a merger with Canada’s TMX Group - which owns the Toronto and Montreal exchanges. The LSE has a market capitalisation of GBP 2,36 billion. If this deal goes ahead the combined value of this merger will be in the region of $6,9 billion.
The world’s second and third biggest in terms of revenue, Deutsche Borse and NYSE Euronext announced that they were in advanced merger talks. This will create the world’s second most valuable stock exchange group with a combined value of around $24 billion.
Singapore Exchange made a bid of A$8,4 billion for the Australia stock exchange, the ASX. But this has been rejected by the Australian government.
Nasdaq is attempting to upset the NYSE deal with Deutsche Borse and itself buy out the New York Stock Exchange (NYSE). Nasdaq is the largest electronics screen based equity securities trading market in the US and is the second largest in the world in terms of market capitalisation. But this is going to be a difficult deal to get through antitrust regulations and has not been welcomed by the NYSE.
Typically these exchange businesses have been successful. They tend to have few competitors in their specific region or country, but with the world becoming smaller from an ease of access perspective and companies more and more multinational, they themselves are having to create bigger scale to firstly retain and secondly to grow their business.
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