Global Trading Value and Volume Surge as Investor Appetite for Listed Securities Grows in H1 2024
New data published by the World Federation of Exchanges (WFE), the global industry group for exchanges and central clearing counterparties, shows that investor appetite for listed securities rose in the first half of 2024. Trading value increased 11.7%, and volumes rose 9.6%, as markets were highly liquid globally despite the backdrop of economic and geopolitical uncertainties. The volatility we have seen in markets in recent weeks shows this uncertainty has carried over to the second half of the year.
In the six months to July 2024, global equity market capitalisation was up 5%, driven largely by the Americas, whilst the rapid growth in the APAC region reported at the end of 2023 slowed. EMEA’s market capitalisation was flat.
Compared to the previous half, IPOs fell 24.2%. The number of IPOs in the Americas rose by 36.4%, whilst both APAC and EMEA registered decreases, down -30.8% and -31.7% respectively. The number of listed companies is down marginally by 0.3% globally, though the number of listings in the Americas fell less than the same period the prior year. The EMEA region saw the sharpest decrease in number of listings, and APAC listings grew by 0.48%.
Despite the overall decline in capital raised through IPOs, the average size of an IPO went up 18.8% compared to H2 2023. This was partially due to seven unicorn listings. The largest unicorn, Puig Brands, listed on SIX Group’s BME Spanish Exchanges. SIX Group’s Swiss Exchange also hosted the second largest unicorn, Galderma Group, a pharmaceutical company.
Looking at other asset classes, exchange traded derivatives continued the growth trend over the last few years, rising 11.6%. There was a dramatic drop in currency options, down 38.2%, due to a regulatory change in India which requires ownership of the underlying asset before buying the derivative. The impact is marked because India was the largest market for currency options.
Dr Pedro Gurrola-Perez, Head of Research at the WFE commented, “For the second half of the year a decline in inflationary pressures and an ease in monetary policy may support the positive trends we observed in H1 2024. The persistent geopolitical tensions, a potential slowdown in the U.S. economy coupled with the uncertainty derived from the U.S. election, could inhibit market growth. If that’s the case, it will be hard on companies looking for capital, investors looking for attractive assets and savers looking to maximise their savings.”
Nandini Sukumar, CEO of the WFE commented, “Investor demand for exchange-traded securities continued to grow, reflecting the fundamental stability of public markets in times of uncertainty. The data shows that investors are here and are looking for capital allocation opportunities. Exchanges call on governments and regulators to pull the necessary policy levers to encourage businesses to float and benefit from public finance. Without a strong pipeline of companies coming to market, the whole economy suffers.”
