|Due to health issues, this site is no longer maintained and will be shut down shortly.|
The U.S. stock market is by far the biggest stock market in the world, as it makes up around 50-55% of the world's total stock market activity, based on market capitalization. But there are hundreds of stock exchanges located around the world - see our list of global stock exchanges.
We currently have in our database 16,905 common and preferred stocks that are traded on stock exchanges in 65 different countries:
|Exchange Country||Security Count||%||Market Cap In US Dollars||%|
|United Arab Emirates||41||0.24%||$0||0.00%|
This data is updated nightly from our database. The market cap totals are converted to U.S. dollars every night using the most recent spot currency exchange rate in our database. Some countries show $0 as the total market cap because we don't currently have a data provider that gives us the market caps of the stocks traded in those countries, or we don't have a data provider that gives us the spot currency exchange rate for that country.
We currently don't have every global stock in our database. Our guess is that we probably have 95% of the world's stocks in our database (even more than that of the world's large cap stocks). There are probably 1,000+ small cap stocks traded around the world that we don't have in our database.
Most U.S. investors can't directly buy foreign securities, so we primarily care about global stocks in the context of trying to understand what U.S. exchange traded funds (ETFs) are buying. The easiest way for a U.S. investor to buy foreign securities is to buy one of the hundreds of U.S. ETFs that buy global stocks. So our primary focus right now when it comes to global stocks is to try to have in our database any global stock owned by a U.S. ETF.
Stock markets around the world are generally classified into one of three categories based on the economic development and financial sophistication of each country:
Here is a quick summary of how the U.S. stock market compares to the rest of the world:
|Country Type||% Share of World Market Cap|
|Developed markets excluding the US||36%|
This is not live data but rather a general approximation. With technology, it is getting easier and easier for U.S. investors to track stock markets around the world. But we don't quite yet have in our database complete information on stocks traded around the world, in order to generate this data ourselves. So this data is an approximation only.
In terms of the number of securities, here is live data on the breakout of the number of stocks we have in our database by country classification:
|Country Type||Security Count||%|
|Developed markets ex US||25,160||149%|
The above classification system is really important because large institutional investors in the U.S. have historically built their investment portfolios by allocating certain percentages to the U.S. stock market, and then other percentages to developed market stocks (excluding the U.S.) and emerging market stocks. So the country classification system determines how trillions of dollars get invested. When a country gets promoted from an emerging market country to a developed market country (like South Korea did in the past few years), it is big deal.
As explained above, how a particular country gets classified is really important. Similarly, how a particular company gets classified is also important. When building an index of "emerging market stocks", the first thing an index provider has to do is classify every stock (or company) into a country. That decision then determines whether the stock is an "emerging market" stock or not. It sounds easy, and most of the time it is, but sometimes there are some complications.
What determines whether a company is a U.S. company? 97% of the time, the answer is easy. A U.S. company is a company that is incorporated in the U.S. and has their primary stock trading on a U.S. stock exchange. 3% of the time, the answer gets more complicated. These are typically situations where a company is incorporated in a tax haven like the Cayman Islands or Bermuda. Most index providers have rules to specifically handle these tax havens. Typically, if a company is incorporated in a tax haven, the index provider will classify the company as a U.S. company if the company is headquartered in the U.S. and the company's primary stock is trading on a U.S. exchange.
What determines the "country" of a foreign company? Similar rules apply, but at times it gets a little more complicated with foreign companies. Maybe 90% of the time, the answer is easy. If a company is incorporated in Brazil and has its primary stock trading on a Brazilian stock market, it is a "Brazilian" company. But with foreign companies, there are more situations where it is not easy to determine how to classify a company. A company may actually be incorporated in Ecuador, and trade on a Brazilian stock market. But if it's headquarters is in Brazil, is the company from Ecuador or Brazil? Not all index providers follow the same set of rules. Some index providers will look to see if most of the company's revenue is derived from business in Eduador, or Brazil.
Chinese companies are particularly hard to classify. Because of China's unusual political and economic system (a communist country that has a limited form of free market economics), Chinese companies that want to raise money have often been afraid to use China's internal stock markets. So they have instead opted to be incorporated somewhere outside of China (such as in Hong Kong or Singapore) and have issued stock on a stock exchange in Hong Kong or the U.S. But in substance, they are really a Chinese company. And their headquarters is typically still located in mainland China. See our educational article about China's stock market. So most index providers have special rules to determine what constitutes a "Chinese" company.
All data is a live query from our database. The wording was last updated: 11/12/2018.
2022 © Stock Market MBA, Inc.