Why are American stock exchanges like the NASDAQ more respected than other exchanges like the Canadian NEO?
In: Economics
The US has ten times the population and thirteen times the GDP of Canada, and so it’s reasonable that its stock exchanges see significantly more volume.
Exchanges in the rest of the developed world aren’t necessarily less *prestigious*, they just get less media attention because they’re lower value and volume.
Developing markets can have problems with regulation, corruption, and government mismanagement so they’re often treated with a little more suspicion from regulators.
Are they though? Maybe from a US perspective they are.
But as a risk adverse European I don’t respect or trust Nasdaq nor Nyse and rather stick to stock exchanges in highly regulated EU countries like Euronext (Amsterdam, Paris, Frankfurt) or SIX (CH).
I would say it is a matter of personal preference. Most of my friends and colleagues who are also active in stocks don’t invest in American stock exchanges. Simply too much volatility.
They’re big, diversified, and have a lot of trading volume. So they get a lot of attention.
Canada’s largest stock exchange is about the same size as Microsoft. So it tends to get less attention.
American stock exchanges like NASDAQ are well-respected because they’re big and have lots of famous companies listed, like Apple and Microsoft. They follow strict rules to make sure trading is fair and safe for everyone. People from all over the world want to invest there because they trust it. Canadian exchanges like NEO are also good, but they’re smaller and not as famous globally, so they’re not as well-known.
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