NO 233 – JULY 2012
Half year market highlights

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WFE Focus July 2012
Market highlights for first half-year 2012

5.3%
Increase In the global market capitalization In
h1 2012

The size of global markets (the global market capitalization) increased by 5.3% in the first half of 2012.

In Americas and Asia Pacific, the relative good performance of stock markets in the first half of 2012 (market capitalization up 9.1% and 4.6% respectively) was not sufficient for market capitalization to reach the levels observed one year ago, before the sharp decline in the summer 2011.

In EAME region, the market capitalization in USD was flat during the sovereign debt crisis in Europe and appreciation of USD.

In constant USD, the EAME region’s market capitalization did increase by 2.1% in the first half of 2012. In Asia Pacific region, the growth rate of market capitalization in constant USD1 was also higher (+6%) than in current USD.

Growth in market capitalization is sometimes the result of an increased number of listed companies, but in the first half of 2011 the total number of listed companies at WFE level was steady.

Decline of trading volumes on stock exchange

Despite the higher market capitalization, the total value of share trading2 of WFE member exchanges continued to decrease significantly falling 14% in the first half of 2012 after an earlier drop of 4% in second half-year of 2011.

The most significant decrease was observed in the Americas region (-20%). This was mostly due to US exchanges (accounting for 90% of the value of share trading) that decreased by 21%. In Canada, the value of share trading also decreased but at a lesser extent (-6%), and in South America it increased by 3%. The significant decrease in the US was partly due to the comparison with high volumes registered in August 2011.

14%
decrease In value of share trading

The EAME region also experienced a significant global decrease of value of share trading (-12%) with contrasted trends. The decrease was important in Europe (-15%) whereas volumes increased by 52% in Africa Middle East region.

In Asia Pacific the decrease of volumes was less pronounced (-5%). Here again, contrasted trends were observed. Volumes remained firm in larger markets (i.e. Mumbai, Shenzhen, Seoul, Shanghai, Tokyo,) whereas other centers experienced significant falls.

In terms of number of trades, the decrease was stronger in Americas (-25%) than for the value of turnover. In EAME the decline in number of trades (-6%). was less pronounced than for value of share trading. Asia Pacific number of trades increased by 2% while value of share trading decreased.

As a direct result, the average value of trades3 differed between regions: the increase in Americas corresponded to evolution of the market capitalization and index performance; the decrease in EAME and Asia Pacific was accentuated by exchange rates.

Exchange traded derivatives (ETDs)

The number of equity ETDs decreased significantly in the first half of 2012 (-11%). While relative stability was observed on single stock derivatives, stock index and ETF derivatives that had increased sharply in 2011 fell by 19% in the first half of 2012. Despite the global slowdown in equity derivatives in the first half of 2012, volumes remained higher than in the first and the second half of 2010.

Regarding, interest rate derivatives, the number of traded contracts remained stable in the first half of 2012.

Despite the global slowdown in equity derivatives in the first half of 2012, volumes remained higher than in the first and the second half of 2010.

Bond trading

For the second consecutive half-year, bond trading was down (-9.3%) for the first six months of the year, reaching USD 14.2 trillion.

ETFs

A sharp decrease (-33.8%) on the turnover realized on the first six months. The decrease was mainly due to the Americas region performance (-33.7%) which represents more than 88% of the WFE total turnover.

Securitized derivatives (warrants and certificates)

Volumes on this segment decreased by 35.6%, driven by Asia Pacific region that account for 76% of the WFE total turnover.

Market capitalization in constant USD is calculated with exchange rates at the end of 2010.
Electronic Order Book share trading value
The calculation of the average value of trade is weighted by the share of each exchange in the total value of share trading (in USD).
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