Asian market volumes struggle in H1

Equity trading volumes in the first half of 2014 have been lacklustre across Asia’s core markets, in sharp contrast to other parts of the world.

Equity trading volumes in the first half of 2014 have been lacklustre across Asia’s core markets, in sharp contrast to other parts of the world.

Australian trading turnover during H1 2014 reached AU$421.77 billion, down 11.4% from AU$476.3 billion in the same period last year.

However, market turnover has been relatively stable since the middle of last year, with the second half of 2013 clocking up AU$422.1 billion of shares traded. Australia has also seen a recent uptick in trading in recent months. While volumes bottomed out at AU$62.2 billion in April, June saw the second consecutive month of growth at AU$71 billion, up 14% over the past two months.

Additionally, dark trading has seen a significant increase despite the introduction of new rules in May last year, which required those trading in the dark to demonstrate that they had achieved price improvement on their trades.

In the first half of 2014, Australian dark trading volume totaled AU$31.7 billion, an increase of 31.4% compared to the AU$24.12 billion seen during the same period last year and also up from AU$27.23 billion traded in H2 2013.

Dark trading momentum shows little sign of slowing down in the country and has continued to steadily rise since the beginning of year, up from AU$5.48 billion in June from AU$4.3 billion in January.

Hong Kong remained relatively flat over the past year, with total equity trading worth HK$5.82 trillion in H1 2014, only marginally down from HK$5.83 trillion in 2013. Trading in Hong Kong also improved significantly in H1 compared to H2 2013, up 9% from HK$5.34 trillion.

Hong Kong’s market tends to be highly cyclical, with high trading volumes early in the year that peter out into the summer. This trend is already evident for 2014 with a significant decline in volumes during Q2. In March, the equity market peaked with share turnover of HK$1.17 trillion and has fallen now for three consecutive months. By May, Hong Kong trading had dropped to HK$814 billion and then slid a further 6.3% to HK$762 billion.

Japan’s equity markets have failed to sustain to uplift received as a result of ‘Abenomics’, the series of economic reforms introduced in December 2012 by Prime Minister Shinzō Abe.

Equity trading turnover in Japan hit JPY391.6 trillion in H1 2013 after confidence in the Japanese economy was boosted by Abenomics, but tumbled 10% to JPY351.5 trillion in H2 of that year, before dropping a further 2% to JPY351.5 trillion in the first six months of 2014.

Over the course of the quarter, equity market trading has been mixed.  The high for the year was seen in January at JPY66.4 trillion but then proceeded to fall through to May, dropping 26% to JPY49.09 trillion. However the markets rebounded somewhat in June, with turnover rising 16.6% from May to JPY57.25 trillion.