Thursday, May 19, 2005

Trading around the world

Yesterday I talked about the amazing rise in stock trading activity in the U.S., measured by the number of transactions in the two main markets (NYSE and Nasdaq). But how does America compare with other nations?

Last year, there were around 6.4 trades per person in the U.S. This is pretty high compared to most developed countries. For example, in Canada there were only 1.1 trades per person, while in the U.K. and Germany there were only 0.9 trades per inhabitant.

But Americans’ love of trading doesn’t hold a candle next to the Taiwanese, who carried out 7.7 trades per person last year. In fact, most East Asian nations have very high levels of trading: Hong Kong registers 5.5 trades per person, while Korea’s level stands at 2.9 ( no data on Japan though).

I don’t know why the differences are so big. Maybe it’s a cultural thing: Europe’s financial culture is much more bank-centered, while the Chinese appetite for risk is legendary.

(Trading data is taken from this site, while population data can be found at the Census site).