2012 WFE Market Highlights
Here is the annual report of the Global Organization WFE (World Federation of Exchanges) regarding the year 2012.
EQUITY & DERIVATIVES TRANSACTIONS
2012 has proved a challenging year for world exchanges as the volumes of all products traded on WFE members were -22.5% down in equity transactions (USD 49 tn) and -20% fin the derivatives transactions (14.9bn of equity and interest rates contracts traded). Cash markets continued to suffer from the relative disaffection for equities; derivatives markets were affected from the continued low interest rate environment and the significant decrease of volatility, both factors reducing hedging needs.
OTHER FINANCIAL PRODUCTS
Other financial products traded in WFE exchanges also experienced very sharp declines of turnover value:
ETFs : -31.6% (USD 7.3 tn)
Securitized derivatives: -43.3% (USD 652 bn)
Bonds: -20% (USD 26.1 tn)
MARKET CAPITALIZATION
On a more positive note, the only indicator growing was the market capitalization. After the sharp decline observed in 2011 during the summer, it recovered in 2012 with a 15% growth rate, getting back to its end-of 2010 level. Number of listed companies remain stable at 46 332 (-0.8%).
Equity Markets Capitalization USD 55 tn (+15.1%)
BEST PERFORMER
The best performance in 2012 was observed in the Americas (+17.2%) followed by Asia-Pacific (+15.4%) and EAME (+11.6%).
i) Americas
In the Americas, the growth was mainly driven by the US exchanges that increased 19% while Canada increased slightly less (8%) and contrasted trends were observed in Latin American countries.
ii) Asia-Pacific
In Asia-Pacific, the highest growth rates were observed in Thailand (+45%), Philippine (+39%), Singapore (+28%), Hong Kong (+25%) and India (+25%) and relatively lower growth rates occurred in mainland China and Japan (respectively +8% and +5%).
iii) AfricaMiddle East
In EAME, Africa Middle East region experienced a 20% growth rate, eurozone increased 14% while the LSEG in the UK rose 4%.
NUMBER OF LISTINGS
In 2012 the total number of listed companies on WFE exchanges was steady (-0.3%): -0.4% in Americas, +0.9% in Asia-Pacific and -2.2% in EAME.
Number of listings 46 332 -0.8%
Despite the good performance of market capitalization in 2012, Electronic Order Book (EOB) turnover value declined by 22.5%. All the regions were affected by this trading volumes drop: EAME (-24.1%), Americas (-23.2%) and Asia Pacific (-20%).
Value of share trading USD 49 tn -22.5%
AVERAGE TRANSACTION IN 2012
In 2012, the average transaction size (weighted by value of share trading) slightly increased from USD
8 100 to 8 300. In the EAME region the average transaction size followed the Americas trend and stopped decreasing. Though we are lacking more detailed figures, this could be an indication of the slowdown in activity of algorithmic trading (including HFT) in this region. The average transaction size in Asia Pacific is still below the WFE average indicating a very active retail market.
CONTRACTS TRADED
For the first time since 2004, the number of equity derivative contracts traded on exchanges decreased in 2012 (-21%). Index products were the most affected: -39.6% for stock index options, -20.3% for ETF options, and -14.1% for stock index futures.
Number of contracts traded 14.9 bn -20.3%
This significant decrease in stock index options was partly explained by the sharp decrease of number of index options traded on Korea Exchange following the multiplication by five of the size of the newly listed contracts on KOSPI 200 since March 2012. Excluding Korean index options, the decline in stock index options was -9.4%. And the overall decline in equity and IR derivatives was -11%.
This decline in equity derivatives mirror the one in the value of cash equities traded and is also probably explained by the significant decrease in volatility observed in 2012. Volatility indices decreased significantly in 2012, except in Japan, to end the year at relatively low levels.
S&P 500 Volatility (VIX): - 23% (13.02)
EURO STOXX 50 Volatility: -33.6% (21.35) and FTSE100 Volatility Index: -19.7% (18.05)
Nikkei Stock Average Volatility Index : + 4.5% (22.45) and HSI Volatility Index : -30.2% (17.19)
The volume of Interest Rate options and futures traded also decreased significantly in 2012 (-17%). Factors generically seen as unfavorable for interest rates derivatives (low interest rates environments, no economic growth and credit expansion) continue to prevail in certain regions and could explain that trend.
OTHER FINANCIAL PRODUCTS
Bonds
After two years of significant increase, Bonds trading also declined in 2012 (-20%).
Bonds (cash markets) Turnover value USD 26.1 tn -20%
ETFs
A sharp decrease (-31.6%) on the turnover realized in 2012. The decrease was mainly due to the United States performance (-33%) which represents 83% of the WFE total turnover.
Turnover value USD 7.3 tn -31.6% Listings 7 721 +12%
Securitized derivatives
Securitized derivatives listings continued to grow (+16.2%), but overall volumes declined sharply (-43.3%)
Turnover value USD 652 bn USD -43.3% Listings 1 263 492 +16.2%
MEMBERS OF WFE
Table: Members of the World Federation of Exchanges ► Visit
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Abu Dhabi Securities Exchange |
Amman Stock Exchange |
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Athens Exchange |
Australian Securities Exchange |
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Bermuda Stock Exchange |
BM&FBOVESPA S.A. |
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BME Spanish Exchanges |
Bolsa de Comercio de Buenos Aires |
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Bolsa de Comercio de Santiago |
Bolsa de Valores de Colombia |
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Bolsa de Valores de Lima |
Bolsa Mexicana de Valores |
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Bourse de Casablanca |
Bourse de Luxembourg |
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BSE Limited |
Bursa Malaysia |
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CBOE Holdings, Inc. |
China Financial Futures Exchange |
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CME Group |
Colombo Stock Exchange |
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Cyprus Stock Exchange |
Dalian Commodity Exchange |
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Deutsche Börse AG |
Gretai Securities Market |
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Hong Kong Exchanges and Clearing |
Indonesia Stock Exchange |
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IntercontinentalExchange |
International Securities Exchange |
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Irish Stock Exchange |
İstanbul Menkul Kıymetler Borsası (İMKB) |
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Japan Exchange Group, Inc. |
Johannesburg Stock Exchange |
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Korea Exchange |
London Stock Exchange |
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Malta Stock Exchange |
Moscow Exchange |
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Muscat Securities Market |
NASDAQ OMX |
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National Stock Exchange of India Limited |
NYSE Euronext |
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Oslo Børs |
Philippine Stock Exchange |
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Saudi Stock Exchange (Tadawul) |
Shanghai Futures Exchange |
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Shanghai Stock Exchange |
Shenzhen Stock Exchange |
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Singapore Exchange |
SIX Swiss Exchange |
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Stock Exchange of Mauritius |
Stock Exchange of Thailand |
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Taiwan Futures Exchange |
Taiwan Stock Exchange |
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Tel-Aviv Stock Exchange |
The Egyptian Exchange |
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TMX Group Inc. |
Wiener Börse AG |
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Zhengzhou Commodity Exchange |
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