NO 246 – AUGUST 2013

WFE Focus


Outside its members which meet the qualifying characteristics and criteria established by WFE to integrate the organization, the Federation has 2 other categories of relationship with exchanges: affiliate and correspondent. Affiliates and Correspondents are mainly emerging markets, smaller regulated exchanges which have chosen to establish a close relationship with WFE, and which aspire for most of them to become a WFE member in the future. In general, they don’t yet comply with the WFE membership criteria, and unlike members they are not subject to peer review or vote by the General Assembly to obtain the status of affiliate or correspondent. In establishing this relationship with WFE, these exchanges have access to all the organization’s information and meetings. A dedicated section of the WFE Annual Report is devoted to their statistical data and a “Half-year market survey” based on their main market aggregates is elaborated on a regular basis.

WFE welcomes and encourages these markets to join the Federation as they represent the future of the securities industry. Most of them are in fact developing at a sustained pace unknown before, and raise their market standards, progressing towards WFE criteria and membership. Encouraging the development of markets is a core commitment of the WFE.

First-half year 2013 Market Highlights for WFE Affiliate & Correspondent exchanges

The first half year 2013 market performance of Affiliate and Correspondent exchanges is briefly examined through four main market indicators: domestic market capitalization, number of listed companies, share trading value and general index. 32 of these exchanges answered the statistical questionnaire sent early July 2013.

• Domestic market capitalization

The domestic market capitalization of WFE Affiliates and Correspondents which answered the questionnaire increased by 10% on average at the end-June 2013 compared to end-December 2012. This can be favorably compared to the 3% recorded for the same period for WFE members, and confirms the strong development pace of emerging markets recently. Domestic market capitalization of Affiliates and Correspondents located in Asia Pacific and EAME regions grew by 10% while for those located in Americas it increased by 6%. It is worth noting that while BRIC countries (Brazil, Russia, India, China and South Africa) showed rather disappointing performances since the start of the year, the other emerging markets continued to grow at a sustained pace.

• Share trading value

The dynamism is confirmed when looking at share trading value: it grew by 76% in the first half of 2013 compared with the second half of 2012. This performance was much more favorable as compared to WFE members’ performance during the same period (23%). Affiliate and Correspondent exchanges in EAME region were the most lively markets for share trading as it grew by 95% during this period. The most active were the Bahrain Bourse, Dubai Financial Market and Kuwait SE. The good performance recorded by African bourses (BVRM, Ghana SE, Nairobi SE, Namibia SE and Nigeria SE in particular) should also be mentioned, confirming the strong and recent vitality of this region. Finally, share trading value of exchanges in Asia-Pacific surged by 44% with HoChiMinch SE share trading value surging by 122%.

• Number of listed companies

In overall, Affiliates and Correspondent exchanges which responded to the questionnaire had a total of 3 843 domestic and foreign companies listed on their markets, almost the same number as the end of 2012.

• Index performance

Price indexes of the 32 Affiliate and Correspondent exchanges increased by 16% on average at end-June 2013 compared to end-December 2012. Affiliates and Correspondents price indexes showed a better performance than the WFE members for the same period (5.4%).


The vitality of WFE Affiliate and Correspondent exchanges was confirmed in the first half of this year. In general, their market performances were higher than those of WFE members. Another sign of this development and the upgrade in market quality was the recent acquisitions by several Affiliates and Correspondents of trading engines and clearing systems from developed markets; the most recent example is the agreement signed by Bahrain Bourse to acquire NASDAQ OMX’s Horizon trading platform as well as NASDAQ OMX’s post-trade solution.