Capital Market History
Updated: May 27, 2018
1. The First Stock Exchange
The world’s first stock exchange was established in Antwerp, Belgium in 1460 under the rule of Philip the Good. It mainly traded financial securities, primarily bonds. Brokers and moneylenders would meet there to deal with business, government and even individual debt issues. In the 1500’s there were no real stocks. People dealt exclusively in promissory notes and bonds. There were many flavours of business-financier partnerships that produced income like stocks do, but there was no official share that changed hands.
2. The Birth of NYSE (New York Stock Exchange)
Despite the ban on issuing shares, the London Stock Exchange was officially formed in 1801. Since companies were not allowed to issue shares until 1825, this was an extremely limited exchange.
Contrary to what some may think, the NYSE wasn’t the first stock exchange in the United States. The Philadelphia Stock Exchange holds that title. However, the NYSE soon became the most powerful stock exchange in the country due to the lack of any type of domestic competition and its positioning at the center of U.S. trade and economics in New York. The London Stock Exchange was the main stock market for Europe, while the New York Stock
Exchange was the main exchange for America and the world.
3. The World’s First IPO
The Dutch East India Company undertook the world’s first IPO and therefore, became the first public company to issue stock. It also played an integral role in modern history’s first market crash. The Dutch East India Company was formed in 1602 by a royal charter granting a 20-year monopoly on trade with the East Indies and sovereign rights in any newly discovered territories.
4. The First Electronic Stock Market – Nasdaq
A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971.
The term “Nasdaq” is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the world’s foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.
5. Capital Market History in Indonesia
When the Netherland Indische dominating in Indonesia, the government established foremost stock exchange in Batavia-now Jakarta-at December 14, 1912 by De Vereniging voor de Effecten Hande. It mainly sell shares and bonds bonds of Dutch plantation companies operating in Indonesia.
With the expansion of the Stock Exchange in Batavia, on January 11, 1925 and January 1, 1925 the Stock Exchange was established in Surabaya and Semarang. Indonesian Stock Market had twice closed. First on the 10th of May 1940, when the second world war breaks, and second in 1958 when Indonesia’s currency inflates. The Indonesian Stock market finally rose from ashes in the dawn of the New Order Government.