The World Federation of Exchanges (WFE) has released figures for H1 2011 that reveal a decline in trading volumes in the Americas, counterbalanced by rising trading activity in Asia.
Over the last 12 months, the total value of equity market capitalisation across the WFE member exchanges has grown 28% in US dollar terms worldwide. The trading volume for equities was down by -0.8% for the first six months of 2011, compared to the same period last year.
Global trading volumes declined from previous rallies from the summer of 2010 onwards; low equities trading volumes have been a concern for many market participants ever since. However the WFE figures suggest that a more nuanced view could be useful for buy-side market participants and investors.
The H1 2011 results differed markedly by region; there was a 9.3% decrease in the Americas compared to the first half of 2010, versus a 13.8% increase in Asia-Pacific trading volumes, with every exchange in the region, bar India's Bombay Stock Exchange and National Stock Exchange, showing growth by value traded. European trading volumes saw a 3.2% increase over the same period with far less consistency between venues.
The Americas decrease is largely attributed to the US, whose members make up 91% of the total regional trading value and 45% of the WFE total. By contrast, Brazilian exchange BM&F Bovespa, for example, registered a 2.1% increase in trading volumes in Q1 2011 versus the same period last year.
In contrast the US saw the greatest growth in capital raised through equity markets – a 74% increase year-on-year to US$125 billion – where Europe raised just US$64.5billion, a fall of 52%. Asia raised the greatest total though, increasing 14% over H1 2010 to US$171.1 billion.
Exchange-traded futures and options registered higher volumes in most asset classes, while the increase in Asia saw the Korea Exchange take the highest growth rate, with a 21% increase across the period.
Also notable was a 9.8% increase in the number of traded contracts in the derivatives markets in H1 2011 versus H1 2010. Amongst the top 10 in equity derivatives, the National Stock Exchange of India had the highest increase, at 51%.
The WFE also registered strong growth in the market capitalisation of stock exchanges, a measure of the total value of listed companies. Interestingly, as the total number of trades declined by 5.1% for the first six months of 2011 compared to the first half of 2010, the average value of trade actually registered a slight increase, from US$8,900 to US$9,100 – a move at odds with the broad trend of falling trade sizes over the last few years.
The WFE is the trade association for the operators of regulated financial exchanges. With 52 members, the WFE aims to develop and promote standards in markets, support reform in the regulation of OTC derivatives and bolster international cooperation between regulators.