Market capitalisation growth rate up, volume of exchange-traded products down

January 23, 2013

The World Federation of Exchanges' (WFE) annual survey of global markets found that while the global market capitalisation increased 15.1% in 2012 , the volume of all products traded on WFE member exchanges fell significantly.According to worldwide statistics compiled by the WFE, the value of Electronic Order Book (EOB) share trading was down 22.5%, and the number of derivative contracts traded on-exchange decreased by 20%.

"We appreciate our members' commitment to helping us compile our Annual Market Statistics, as we believe it is important to offer a true, objective picture of the current state of on-exchange trading worldwide," said Hüseyin Erkan, CEO of the WFE. "Our 2012 Global Market Highlights offers the most comprehensive series of data covering a large range of exchanges' activities, allowing for a more detailed approach of markets."

According to the WFE figures, which are gathered from WFE member exchanges, the number of listed companies remained stable in 2012, while both ETFs and securities derivatives increased their listings. Specific 2012 highlights from WFE are as follows:

Equity Markets

In 2012, the WFE global market capitalisation increased by 15% reaching US$ 54 trillion, getting back to its end-of 2010 level. The best performance was observed in the Americas (+17.2%) followed by Asia-Pacific (+15.4%) and Europe Africa Middle East (EAME) (+11.6%). In the Americas, the growth was primarily driven by the U.S. exchanges that increased 19%.

Despite the good performance of market capitalisation in 2012, all regions were affected by a drop in EOB turnover value:EAME (-24.1%), Americas (-23.3%) and Asia Pacific (-20%).

The number of EOB trades totaled 9.7 billion, down 14.3% from the previous year, while the average transaction size increased slightly from $US 8,100 to $US 8,300.

Derivatives

For the first time since 2004, the number of on-exchange equity derivatives contracts traded in 2012 decreased by 20.4% to 14.9 billion.

The drop in equity derivatives (-21%) mirrors the decline in the value of cash equities and is probably explained by the significant decrease in volatility observed in 2012 .

The volume of Interest Rate options and futures traded also decreased significantly (-17%). Factors generically seen as unfavourable for interest rates derivatives (low interest rates environments, no economic growth and credit expansion) continue to prevail in certain regions and could explain that trend.

Bonds, ETFs and Securitised Derivatives

After two years of a significant increase, bond trading on exchanges also declined in 2012, down 20% to $US 26.1 trillion.

The 2012 ETF turnover value was $US 7.3 trillion (-31.6%) a sharp decrease from the turnover realised in 2011, primarily due to the U.S. performance.However, the number of listings continued to grow, with 7,721 (+12%).

While listings of securitised derivatives continued to grow, increasing 16.2%, the overall volumes declined sharply, down -43.3% to 652 billion.

To view and/or download WFE monthly statistics, please visit http://www.world-exchanges.org/statistics

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