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WFE Focus April 2011
Market highlights for first half-year 2011

Trading on stock exchanges

In terms of value1 of shares traded, the WFE member exchanges accounted for a total of USD 32.1 tn in the first six months of 2011. (table 2a)

Compared with the first six months of 2010, volumes were stable (-0.8%), but this relative stability conceals significant regional differences as the Americas’ trading decreased by 9.3% whereas Asia-Pacific’s volumes rose by 13.8%.

The Americas decrease is mostly due to US exchanges (which represent 91% of the regional total value of share trading, and 45% of the WFE total). The combined US figures were down 11.3% in the first half of 2011 compared to the same period in 2010. The value of share trading in most of the other exchanges in the region increased during the same period.

In the Asia Pacific region (up 13.8% globally), all the exchanges’ USD value of share trading increased, except for the two Indian exchanges.

The EAME region situation was much more contrasted with significant discrepancies among exchanges. Total value of exchange trading in EAME increased by 3.2%.

A slight decrease in total number of trades led to a larger average value of trade

The total number of trades declined by 5.1% in the first six months of 2011 compared to the first half of 2010. This trend coupled with stable volumes led to a slight increase of the average value of trade2 (USD 9 100).

The size of global markets (the global market capitalization) increased significantly over the past 12 months.

Comparing June 2011 to June 2010, WFE total market capitalization increased by 28% at USD 56.6 tn. The trend was general in all three time zones.

Growth in market capitalization can be the result of several factors – the good performance of several major indices (especially the US markets in late 2010) raised the value of listed companies (table 3). This rate of increase in market capitalization is much more modest when looking at the first six months of the year (+3.1% - see table 1d).

Secondly, a weak US dollar inflated the value of other markets (table 1a).

Rate of growth in capital raised on stock exchanges turns negative

Finally, new capital raised (table 4) is another component for higher market capitalization. The pace of raising capital was slower in the first six months of 2011 versus the same period a year ago. The number of new companies on stock exchanges (IPOs) was 13% higher thanks to exchanges known for listings of small and medium size enterprises (SMEs). TMX Group 148 new listings, Shenzhen Stock Exchange I44 and Warsaw Stock Exchange 101 lead the way.

Strong growth of derivatives markets

The first half of the year saw a net increase in terms of number of contracts traded, +9.8% globally.

Interest rate derivatives increased 8.75% following the rising uncertainty about inflation and interest rates policy.

Among equity products, stock index options (+23%) increased significantly compared to single stock options (+0.9%). Single stock futures were up 1.1% while stock index futures were down 4%.

Bond trading

Bond trading was significantly up (+60%) on the first six months of the year, reaching USD 16.9 tn.

ETFs

A sharp decrease (-19.6%) of the turnover happened on the first six months (USD 4.5 tn). The decrease is due to the Americas figure (-19.6%) which represent more than 85% of the WFE total turnover.

Securitized derivatives

Volumes on this segment confirmed its growth (+16.4% on the first six months of 2011) reaching USD 581 bn of turnover.

Electronic order book share trading value
All calculations on average value of trade are weighted by share trading value (in USD)
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