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The World Federation of Exchanges (“WFE”), which represents more than 200 market infrastructure providers including exchanges and CCPs, today published its H1 2016 Market Highlights.
KEY HIGHLIGHTS
- Cash equity markets experienced a decline of 24.0% in terms of value traded, and 6.9% in terms of number of trades in the first half of 2016 compared to the same period in 2015. These declines largely reflect a slow-down in trading activity in the Asia-Pacific region, particularly mainland China.
- FX and commodities exchange traded derivatives led a 1.4% rise in all exchange-traded derivatives.
According to the WFE’s half-year statistics, the key trends of the year thus far are as follows:
- Global market capitalisation decreased 9.4% from H1 2015, to reach USD 67.2 trillion compared with USD 74.2 trillion. Asia-Pacific accounted for USD 4 trillion of this decline, ending the half year at USD 23.3 trillion, down 14.9% from the end of the first half of 2015. EMEA exchanges were down USD 1.8 trillion (a decline of nearly 10%) followed by the decline of USD 1.1 trillion in the Americas (nearly 3.6%). The USD 29.14 trillion market capitalisation as at end June 2016 in the Americas is, however, up slightly (4.3%) on the number at end 2015.
- The value of share trading decreased 24.0% worldwide to USD 44.9 trillion in the six-months to June 2016 compared with USD 59.2 trillion in the same period in 2015. Most of the decrease is attributable to the decline in trading activity in the Asia-Pacific region where the value of share trading decreased 47.0% from that seen in the first half of 2015. The Americas bucked this trend, with value-traded in H1 2016 up 2.3% on H1 2015.
- Total number of trades in H1 2016 decreased 6.9% from H1 2015. As the Asia-Pacific region accounted for 66% of all trades in the first half of 2015 this decline is entirely due to a 20.6% drop in the number of trades in this region. Both the Americas and EMEA experienced an increase in number of trades in H1 2016 compared to the same period in 2015 (up 22.9% and 8.8% respectively).
- IPOs and investment flows: Total new listings in the first half of 2016 (including IPOs) were down 48.9% overall compared to the first half of 2015. Similarly, investment flows channelled through exchanges declined by nearly 31.4% in the first half of 2016 compared to the same period of 2015. Within this figure, capital raised through IPOs (which accounted for just under 10% of total capital raised) decreased by 64.4% and capital raised by already listed companies decreased by 24.1%.
- Exchange Traded Derivatives (ETD) volumes (as represented by number of contracts traded) ended this six-month period 1.4% up compared to the first half of 2015. This was fuelled mainly by increases in the number of commodity and currency derivatives traded, up 46.8% and 26.1% respectively, versus the same period in 2015.
Nandini Sukumar, CEO, WFE said: “The first half of 2016 saw a marked decrease in global market capitalisation, led by Asia-Pacific, but felt across all three regions; this is a continuing downward trend since the second half of 2015. It is interesting to note, however, the strong performance of both the Americas and EMEA in terms of number of trades. Moreover, the growth in the value of share trading in the Americas also supports a robust H1 for the region overall. As ever, our data provides a statistical view of underlying market activity, and demonstrates the role exchanges provide in serving the real economy.”
“The uptick in volumes for exchange traded derivatives is of particular interest,” added Siobhan Cleary, Head of Research & Public Policy, WFE. “This has been supported primarily by steady increases in the number of FX and commodity derivatives traded.”
