By Peter OBIORA InvestAdvocate

New York (INVESTADVOCATE)-The World Federation of Exchanges (WFE) on Monday said global market capitalisation climbed down 9.4 percent from half-year (H1) 2015 to $67.2 million compared with $74.2 trillion recorded a year ago, according to WFE’s H1 2016 Market Highlights.

The key highlights of the over 200 market infrastructure providers including exchanges and CCPs, shows that cash equity markets experienced a decline of 24 percent in terms of value traded, and 6.9 percent 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,” the report affirmed.

WFE says foreign exchange and commodities exchange traded derivatives led a 1.4 percent rise in all exchange-traded derivatives.

According to the WFE’s half-year statistics, the key trends of the year on global market capitalisation shows that out of $67.2 million reported in the review period,  Asia-Pacific accounted for  $4 trillion of this decline, ending the half year at $23.3 trillion, down 14.9 percent from the end of the first half of 2015.

The report affirmed that European, Middle East & African Exchanges (EMEA) were down $1.8 trillion a decline of nearly 10 percent followed by the decline of $1.1 trillion in the Americas nearly 3.6 percent. “The $29.14 trillion market capitalisation as at end June 2016 in the Americas is, however, up slightly 4.3 percent on the number at end 2015,” the report added.

Also, the value of share trading dipped 24 percent globally to $44.9 trillion in the six-months to June 2016 compared with $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 percent from that seen in the H1 of 2015. The Americas bucked this trend, with value-traded in H1 2016 up 2.3 percent on H1 2015,” the WFE report said.

Similarly, total number of trades in the H1 period of 2016 decreased 6.9 percent from H1 2015. As the Asia-Pacific region accounted for 66 percent of all trades in the first half of 2015 this decline is entirely due to a 20.6 percent 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 percent and 8.8 percent respectively, the report added.

In terms of IPOs and investment flows,  total new listings in the first half of 2016 including IPOs were down 48.9 percent overall compared to the first half of 2015. In the same vein, investment flows channeled through exchanges declined by nearly 31.4 percent 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 percent of total capital raised decreased by 64.4 percent and capital raised by already listed companies decreased by 24.1 percent,” WFE disclosed.

On Exchange Traded Derivatives (ETDs), volumes as represented by number of contracts traded ended H1 2016 period 1.4 percent up compared to the H1 of 2015. “This was fuelled mainly by increases in the number of commodity and currency derivatives traded, up 46.8 percent and 26.1 percent respectively compared to the same period of 2015.

“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,” Nandini Sukumar, CEO, WFE said:

“The uptick in volumes for exchange traded derivatives is of particular interest. “This has been supported primarily by steady increases in the number of FX and commodity derivatives traded,” added Siobhan Cleary, Head of Research & Public Policy at WFE.

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