Why do some countries have more than one major stock …


Why do some countries have more than one major stock exchange?

nomi king 8 months 1 Answer 159 views

Answer ( 1 )

  1. Very good question. Stock exchanges are usually not government organizations and can be multiple. In case of India, BSE (Bombay stock exchange) is much older (came into existence in 1875) whereas NSE is quite new (came into existence in 1994). BSE was old and was lacking transparency and technology. Due to this in 1992, PV Narsimha Rao worked with companies such as LIC, SBI etc and came up with a powerful, tech-savvy and modern (ELECTRONIC) stock exchange named NSE.

    So, long story short- the point is due to market dynamics, there might be more exchanges in a single country. This is different from central bank, which each country has only one!

    You can compare a stock exchange with a grocery shop! As long as a grocery shop has buyers (customers) and sellers (vendors), the grocery shop will remain in business. So you can have multiple grocery shops – in same way, you can have multiple exchanges in a country! And the way, potato is sold at 2 shops with different prices- same way same stock might be sold at 2 exchanges with different prices

Leave an answer