The paper presents analysis of market concentration in Australiaâ€™s stock market and explores what this might tell us about the state of competition in the real economy. It finds that, on most measures, Australiaâ€™s stock market is highly concentrated but is becoming less concentrated over time. Many studies, including leading books on competition policy, have used stock market concentration as a proxy for market concentration in the economy, usually due to data constraints. The paper warns against this. Using the stock market for competition analysis incorrectly defines markets and competition, excludes most competitors, ignores important market dynamics and leads to erroneous results. Declining stock market concentration should not be taken as a sign that competition in the economy is improving.