The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, today published its H1 2019 Market Highlights report.
According to the WFE’s statistics, the key trends of H1 2019 were as follows:
Global market capitalisation was up 1.6% at the end of H1 2019 compared to H1 2018.
- The increase in global market capitalisation in H1 2019 took place after a sharp year-on-year decline in global market capitalisation at the end of 2018, for the first time since 2014. Thanks to the H1 2019 increase, domestic market capitalisation is now at a comparable level vs the end of H1 2018 (+1.6%).
- Compared to H2 2018, global market capitalisation was up 17.8% at the end of H1 2019.
- This was due to an increase across the three regions, with the Americas up 17.6%, the Asia-Pacific region up 21.3% and the EMEA region up 13.6%.
- This increase has been steady overall, with constant month-on-month increases over the first six months of 2019. This excludes the month of May, which saw a global 4.3% decrease.
- All three regions experienced a similar trend, with steady month-on-month increases, a halt in May and a final increase in June.
- As compared to H1 2018, the value of trades in equity shares decreased by 11% globally, while the number of trades increased by 11.4% globally. These global figures are driven by diverging regional trends.
- Asia-Pacific shows an opposite trend, with the value of equity trading up 5.5% and the number of equity trades up 23.8% compared to H1 2018.
- Compared to H1 2018 half-year figures, both the Americas and the EMEA regions have seen a sharp decrease in both the value and the number of trades in equity shares, with value traded lower by 17.4% and a 25.8% respectively and the number of trades lower by 5.5% and 15.6% respectively.
The number of listed companies was slightly lower as compared to H1 2018 (-0.5%).
- The number of listed companies at end H1 2019 was slightly down on H1 2018. The change was largely driven by the EMEA region, which has seen a 2.3% decrease in the number of listed companies. In both the Asia-Pacific and the Americas region, the number of listed companies was instead up +0.5% and +1.4% on H1 2018 respectively.
- Compared to H2 2018, the total number of listed companies was essentially the same, with slight increases in the three regions.
Overall, new listings and investment flows fell over the first six months of 2019 compared to H1 2018.
- New listings through IPOs were down 35.2% compared to H1 2018, due to a decline in the number of IPOs in all regions: Asia-Pacific (-32.7%), Americas (-22.3%) and EMEA (-55.4%).
- Investment flows through IPOs also fell by 19.3% compared to H1 2018. This was due to a decline in investment flows in Asia-Pacific (-32%) and a greater decline in the EMEA region (-51.8%). The Americas region recorded an 18.7% increase in investment flows
IPO investment flows in the Americas region were up despite the decline in the number of listings thanks to several large IPOs, such as technology and transportation network company Lyft (Nasdaq), that raised over 2.3 Billion USD; pet food company Chewy (NYSE), that raised over 1 Billion USD; and utility/energy company Neoenergia (B3), that raised nearly 1 Billion USD. In the first six months of 2019, the New York Stock Exchange was the market that recorded the highest amount of fund raised through IPOs in the Americas region, accounted for 16.8 Billion USD.
The Asia-Pacific region held the lion’s share of global IPOs, drawing almost 60% of IPOs worldwide. These allowed companies listing in the region to raise over 27 Billion USD in H1 2019. Hong Kong Exchanges and Clearing (HKEX) recorded the highest number of IPOs in the region (63), raising 8.8 Billion USD alone. Some major IPOs in the region were Hansoh Pharmaceutical Group (HKEX), that raised over 1 Billion USD; vocational training company China East Education Holdings (HKEX), that raised over 600 Billion USD; and Cnooc Energy Technology & Services (Shanghai Stock Exchange), that raised more than 500 million USD.
In the EMEA region, the political uncertainty arising from the unresolved Brexit negotiations and subsequently the change of the UK prime minister is likely to have had a negative influence on the number of listings and investment flows in the EMEA region. Despite that, the London Stock Exchange Group (LSEG) listed 32 IPOs, which raised nearly 5.9 Billion USD. These included some of the largest IPOs globally, such as Italian payment company Nexi Spa (Borsa Italiana), which raised more than 2.2 Billion USD. Deutsche Börse was the second biggest market in the EMEA region after LSEG in terms of investment funds, thanks to a large IPO (Traton, Volkswagen’s manufacturer of commercial vehicles) which alone raised more than 1.5 Billion USD. Oslo Børs was third, raising more than 1.2 Billion USD for seven newly listed companies.
- Non-IPO listings were up 20.9% on H1 2018, thanks to an increase in both the Americas region (+18.4%) and the Asia-Pacific region (+7%). The EMEA region saw a 15.5% decline.
- Investment flows through companies that are listed already declined by 31.4% on H1 2018. This figure was driven by a downturn in all regions.
The value and the number of trades in ETFs fell compared to H1 2018.
- During the first half of 2019, the value of trades in ETFs was 13.6% lower than in H1 2018, driven by decreases in all the regions, particularly in EMEA (-60%).
- Globally, the number of trades in ETFs increased slightly (+0.18%) compared to H1 2018. This result was driven by differentiated regional trends. In the Americas region, the number of trades in ETFs was 2.9% lower than in H1 2018. On the other hand, both EMEA and Asia-Pacific showed a 4.5% and 13.9% increase respectively.
Exchange traded derivatives volumes rose. The volume of options traded was 12% higher than in H1 2018, and 5.3% higher than in H2 2018. The volume of futures traded was 9.8% higher than in H1 2018,
and 5.2% higher than in H2 2018. These gains were driven by increases in volumes traded in a wide range of products, and especially in stock index options and futures and commodity futures.
- Stock index options volumes were up 40.4% on H1 2018, driven by an increase in Asia Pacific, where volumes were 67.1% higher than in H1 2018. Americas and EMEA volumes fell 18.4% and 6.5% on H1 2018. The National Stock Exchange of India was by far the largest exchange in terms of stock index options trading, with over 1.85 billion contracts traded in H1 2019.
- Stock index futures volumes were up 20.6% on H1 2018. This increase was largely driven by the Americas, which recorded a 55.6% growth. Asia-Pacific increased (+5.6%) while EMEA saw a 15.3% decrease on H1 2018. The three biggest markets in terms of trading activity in H1 2019 were CME (over 335 million contracts), followed by Deutsche Boerse AG (over 250 million contracts) and B3 (over 93 million contracts).
- Volumes of commodity options and futures were up 6% and 14.1% respectively, thanks to a positive performance in all regions. In the Asia-Pacific region, commodity options grew by 58.8% on H1 2018 and commodity futures grew by 17.7% on H1 2018. In EMEA commodity options grew by 2.3% on H1 2018 and commodity futures grew by 16.7% on H1 2018. In the Americas, volumes in both products grew by 1.3% on H1 2018. The largest exchange in terms of volume of commodity options traded was CME, with over 75 million contracts in H1 2019. In terms of commodity futures, we note that the three largest markets were all located in mainland China, with the Shanghai Futures Exchange ranking first (over 596 million contracts traded in H1 2019), followed by the Zhengzhou Commodity Exchange (over 520 million contracts traded in H1 2019) and the Dalian Commodity Exchange (over 492 million contracts traded in H1 2019).
- Single stock options volumes were down 2.4% on H1 2018. In the Asia-Pacific region volumes were almost the same as in H1 (+0.1%), while in the Americas and the EMEA regions volumes fell by 2.1% and 7.2% respectively. The lion’s share of single stock options trading was held by American exchanges, with the three biggest markets being B3 (over 480 million contracts traded in H1 2019), Nasdaq (over 352 million contracts traded in H1 2019) and Cboe Global Markets (nearly 262 million contracts traded in H1 2019).
- Single stock futures volumes recorded a 21.2% increase on H1 2018. All regions saw an increase in single stock futures trading, with the largest uptick in the Americas, where the number of contracts traded was several times larger (+319.4%) than at the end of H1 2018. This was driven by activity on the Bourse de Montréal. Asia-Pacific and EMEA also recorded a sizable growth on H1 2018, equal to 28% and 12.9% respectively.
- Volumes of ETF options, which are traded mostly in the Americas regions, were down 19.4% with respect to H1 2018. Volumes of ETF futures were 14.4% lower compared to H1 2018.
- Interest rate options volumes were up 8.5% compared to H1 2018. This result was driven by increases in the Americas region (16%), where 88% of the volume is traded. EMEA, where the remaining 12% of the volume is traded saw a 17.8% decline.
- Volumes of interest rate futures were down 3.6% globally compared to H1 2018. This result was driven by a 14% decline in the EMEA region, accounting for roughly 27% of the market. This was paired with a steady American market, which accounts for 65% of the volumes, up 0.1% compared to H1 2018.
- Currency options were up 22.2% on H1 2018, driven by a positive performance in the Asia-Pacific market (and in particular the Indian exchanges) which grew by 26% on H1 2018.
- Currency futures volumes were slightly down (-0.9%). While the performance in the Americas and Asia-Pacific was positive (+26.1% and +3% on H1 2018 respectively), a downturn in the EMEA region (-25%) more than offset the growth in the other two regions, resulting in a slight global decline.
Read the full H1 2019 Market Highlights report here.