Thursday, March 24, 2011

Global Equity Markets: China Grabs Second Spot (In Terms Of Market Cap)

In February of this year, China surpassed Japan as the second largest economy in the world.

Recent events have likewise altered China’s ranking in the global equity markets (in terms of market capitalization) where China has snatched the second place from Japan.

The US remains on top as the largest equity market in the world, but has seen a steady decline in terms of market share. Most of this decline has been due to the outperformances of many emerging market bourses.

According to Bespoke Invest, (table and charts from Bespoke)


Japan's stock market declined nearly 20% in the days immediately following the tragic earthquake that hit the country on March 11th. While Japanese equities have bounced back a bit, the fall allowed China to surpass Japan in terms of percentage of world market cap.

...As shown, the US continues to hold onto the number one spot by a wide margin at 30.43%. Japan had the second largest market cap in the world at the start of the year, but China has now surpassed Japan and currently ranks second. China currently makes up 7.38% of world market cap, while Japan makes up 7.05%. The UK ranks fourth at 6.49%, followed by Hong Kong (4.77%), Canada (4.38%), and France (3.59%).

The following charts depict on the long process of how China surpassed Japan...


Basically the divergent performances can be seen as Japan’s stagnation vis-a-vis the Chinese juggernaut.

China’s elevated ranking in the global equity markets has aligned with her economic standing relative to the world--a manifestation of shifting wealth distribution.

1 comment:

Nonoy Oplas said...

Another interesting data, Benson. I will use the table above in my new blog article, h/t this blog.