Top 10 Stock Exchanges in the World – And How PSX Compares to Emerging Markets

Exchanges are the lifeblood of the global financial marketplace. They allow companies to raise capital, offer investors a way to build wealth and the health of a nation’s economy is parsed in every up and down of the market. And although the likes of the New York Stock Exchange (NYSE) and NASDAQ are busy stealing the limelight, there are strong regional contenders whose natural performance in developing markets merits consideration.

The Pakistan Stock Exchange (PSX) is a case in point. It may not match the market capitalisation of the globals but PSX has been on a roll, both in terms of its resilience, strong returns in a shaky market and growing international mindshare as South Asia’s go-to bourse.

This write up discusses about 10 largest stock exchanges in the world and also explains how PSX is evolving as an attractive investment avenue.

The World’s Top 10 Stock Exchanges

1. New York Stock Exchange (NYSE) – USA

• Market Cap: $30+ trillion
  
  

• Home to the world’s largest blue-chip companies like Apple, Microsoft, and JPMorgan.
  
  

• NYSE is the gold standard of global finance.
  
  

2. NASDAQ – USA

• Market Cap: $25 trillion
  
  

• Tech-heavy exchange with listings like Tesla, Alphabet, and Meta.
  
  

• Known for innovation and growth-oriented companies.
  
  

3. Shanghai Stock Exchange (SSE) – China

• Market Cap: $7 trillion
  
  

• Driven by state-owned enterprises and China’s economic expansion.
  
  

4. Hong Kong Stock Exchange (HKEX) – Hong Kong

• Market Cap: $4.5 trillion
  
  

• A bridge for international capital flowing into mainland China.
  
  

5. Euronext – Europe

• Market Cap: $7 trillion
  
  

• A pan-European exchange connecting multiple markets.
  
  

6. Tokyo Stock Exchange (TSE) – Japan

• Market Cap: $6 trillion
  
  

• Home to Toyota, Sony, and other Japanese conglomerates.
  
  

7. London Stock Exchange (LSE) – UK

• Market Cap: $4 trillion
  
  

• A global hub for finance, commodities, and multinational listings.
  
  

8. Shenzhen Stock Exchange (SZSE) – China

• Market Cap: $5.5 trillion
  
  

• Known for smaller, innovative tech firms—China’s equivalent of NASDAQ.
  
  

9. Toronto Stock Exchange (TSX) – Canada

• Market Cap: $3.5 trillion
  
  

• Dominated by banking, mining, and energy companies.
  
  

10. Bombay Stock Exchange (BSE) – India

• Market Cap: $4 trillion
  
  

• One of Asia’s oldest exchanges, rapidly growing alongside India’s economy.
  
  

Global Trends in Stock Markets

• Technology-Driven Growth: Exchanges like NASDAQ and SZSE thrive on tech listings.
  
  

• Emerging Markets Rise: BSE, SSE, and PSX highlight opportunities outside Western markets.
  
  

• Digitalization: Online trading platforms are increasing accessibility worldwide.
  
  

Where is Pakistan Stock Exchange (PSX) in this?

The Pakistan Stock Exchange (PSX) might not have made the cut into the top 10 of exchanges worldwide in terms of size but it is increasingly emerging as one of the high growth potential markets.

Formed in 2016 as a result of amalgamation of the Karachi, Lahore and Islamabad Exchanges.

In 2016, PSX was also added to the list of the best-performing stock markets in Asia.

Has been invested in by China, the Middle East and Western institutions.

Why the PSX is Getting Better than Best in EMs

Strong Returns in Volatile Conditions

Despite political and economic pressures, PSX has had strong returns.

Traditionally one of the best-performing exchanges worldwide.

MSCI Recognition

PSX was up-graded to the MSCI Emerging Markets Index earlier on, which is an international acknowledgment.

Resilience and Investor Confidence

Companies listed on PSX have good Corporate Governance.

Confidence is hanging tough even as the currency craters and inflation surges.

Sectoral Diversity

Banking, energy, textiles, cement, IT and agriculture are among the sectors listed.

Offers extensive coverage of the economic fabric of Pakistan.

Gateway for Foreign Investment

Entry cost is lower than in India or China.

Appealing to investors in search of market access to South Asia.

Digital Transformation

Increased transparency with online trading and fintech adoption.

There has been more retail involvement.

Privatization and IPO Growth

Government-led privatization pipeline adds liquidity.

New I.P.O.s provide additional opportunities for investors.

Challenges PSX Faces

Political instability impacts investor sentiment.

For foreign investors there is exchange risk.

The financial literacy in Pakistan is still quite low.

The Future of PSX

CPEC Projects - infrastructure and energy / power investments will continue to be a source for growth.

IPOs are up: More companies are joining the exchange.

Digitalization: Fintech and investing via smartphone have led to the greater retailization of the capital markets.

FAQs

Is PSX a good investment?

Yes, for those of you who crave high-risk high-reward investment opportunities, PSX has some serious upside. Performance in historical terms has been excellent relative to global peers.

Can foreigners invest in PSX?

Yes, international investors can invest via regulated brokers and custodians. The Roshan Digital Account has eased access for the overseas Pakistanis.

What are the risks of PSX?

Political instability

Currency depreciation

Less liquid than NYSE or NASDAQ

What are the peers of PSX in other developing economies?

PSX is inferior to both BSE and SSE but profits can be higher in specific sectors, including banking, cement and IT.

Conclusion

In a world where large players such as NYSE, NASDAQ, and LSE are household names in the global arena, the Pakistan Stock Exchange (PSX) highlights why emerging markets cannot be overlooked. Thanks to its high return, growing digitalization and international contributors, Pakistan's PSX which is still a developing and dynamic exchange was identified as the one being resilient and dynamic enough as well as having large growth potential.

For the investors beyond these bigwigs, PSX presents both challenges and unprecedented opportunities– a true star rising in the battlefield of stock exchanges.