In the first half of 2024 geo-political tensions intensified (the Israel-Gaza war, the continuation of the war in Ukraine, the global elections super-cycle, U.S.-China tensions) while global economies showed mildly positive, although mixed, signs of growth. In the U.S., economic indicators reflected a strong economic performance at the start of the year, but inflation has been persistent, which has delayed the expected reduction in interest rates. By contrast, in the European Union inflation has cooled, but economic growth is faltering.
In line with this, the data we present for the first half of 2024 shows a mixed picture. While market capitalisation grew by 5%, this is less than the 7.5% increase observed in the same period last year. On the other hand, value traded rose by 11.7%, which contrasts with the previous year’s increase of 3.4%. On the downside, the negative trends we observed in H1 2023 in the number of IPOs and in capital raised through IPOs (-28.9% and -24.1%, respectively) persisted this year (-24.2% and -10%), with capital raised reaching the lowest value observed in the last five years.
For the second half of the year, a decline in inflationary pressures and an ease in monetary policy may contribute to support the positive trends we observed in H1 2024; still, global growth is projected by the IMF to be at 3.2 percent in 2024 and 3.3 percent in 2025 with service inflation persistently high, which may slow down the reduction of interest rates. For the second part of 2024, the persistence in geo-political tensions, a potential slowdown in the U.S. economy, and the uncertainty derived from the U.S. election could inhibit market growth.