Stock Market Valuation
Introduction
Market capitalization/capitalisation (often market cap) is a measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares outstanding of a public company. As owning stock represents ownership of the company, including all its equity, capitalization could represent the public opinion of a company's net worth and is a determining factor in stock valuation.

The share of market capitalization of the developed markets is shrinking and emerging stock markets are grabbing a bigger share of the pie. Such a trend is not surprising, because economic growth has been far higher in countries such as China and India and capital inflows to these markets have boosted stock prices and led to a surge of new listings.

Between end 2003 and July, the share of stocks listed in Tokyo fell from 9.4% to 8.7%. Pacific Investment Management Co. (Pimco) managing director Curtis Mewbourne points out that, according to Pimco’s computations, China’s stock market capitalization is now larger than Japan’s—just three years ago, in 2006, Japan’s was 12 times the size of China’s.

Market value of publicly traded shares

$64.99 trillion (31 December 2007)

$53.38 trillion (31 December 2006 est.)

Trends

World

100%

US

30.64%

Japan

8.70%

China

7.64%

UK

6.38%

Hong Kong

4.71%

France

4.17%

Canada

3.26%

Germany

2.82%

India

2.60%

Brazil

2.41%

Switzerland

2.31%

Australia

2.23%

South Korea

1.78%

Spain

1.64%

Italy

1.57%

Taiwan

1.56%

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