Exchange market capitalization up, volumes down in 2012

Trends diverge...

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The following is from the WFE...

The total market capitalization of WFE exchanges increased by 5.3% in the first half of 2012 while global trading volumes continued their decline. The rise in market capitalization was mainly attributed to markets in the Americas and Asia-Pacific regions, according to figures released today by the World Federation of Exchanges (WFE).

Specific 2012 first half highlights from WFE are as follows:

Equity Markets

In the first half of 2012, global equity market capitalization rebounded 5.3% from year end 2011, but still remain below the level from one year ago. The market capitalization in the Europe-Africa-Middle East region was flat during the sovereign debt crisis in Europe and appreciation of USD. The Americas and Asia-Pacific regions increased 9.1% and 4.8% respectively.

Despite the higher market capitalization, the total value of share trading1 of WFE member exchanges continued to decrease significantly falling 14% in the first half of 2012 after an earlier drop of 4% in second half-year of 2011.

The most notable decrease in share trading value was observed in the Americas region (-20%), where WFE exchanges account for only 49% of equities turnover according to Thomson Reuters Equity Market Share Reporter (20 July 2012). The decrease in trading volumes in the Americas region was further pronounced by a 25% drop in number of trades.

Trading value in the EAME region declined 12%. This decline was driven by a 15% decrease in Europe, as the Africa Middle East region rose by 52%. The number of trades declined by 6% (-9% in Europe and +35% in Africa Middle East).

In the Asia-Pacific region, the number of trades increased by 2%, despite a 4% decrease in the EOB share trading value as expressed in USD.

Exchange Traded Derivatives (ETD)

While the volumes of equity ETD remained slightly higher than 2010, the quantity traded decreased significantly in the first half of 2012 as compared to second half of 2011 (-11%). This decrease was primarily driven by a 19% decline in stock index and ETF derivatives, as single stock derivatives remained stable.

The volumes of interest rate ETD were relatively steady (-1.6%) in the first half of 2012.

Bonds, ETFs and Securitized Derivatives

Bond trading on exchanges declined for the second consecutive half-year (-9.3%), settling at $US 14.2 trillion. The EAME region led the decline (-11.0%), while bond trading in the Asia-Pacific region increased 24.4%.

A substantial decrease (-33.8%) in ETF turnover of $US 3.98 trillion was mainly due to a 33.7% decline in the Americas region, which represents more than 88% of the total WFE turnover.

Securitized derivatives (warrants and certificates) volumes decreased by 35.6% to $US 368 billion, driven by a sharp decline in the Asia-Pacific region (-36.9%), which still dominates volume figures (76%).

Additional market statistics and indicators across various exchanges can be found in the searchable Query Tool on the WFE website. This unique feature allows users to procure targeted statistics across a number of years. To view and/or download WFE monthly statistics, please visit http://www.world-exchanges.org/statistics

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