WFE Research Team , London , World Federation of Exchanges | Mar 2017

 

This article looks at investment flows through exchanges in the first two months of 2017. In January and February 2017, total investment flow values were up slightly overall (6.3%) and significantly up in the Americas and the Asia-Pacific region on the same period in 2016. In contrast the EMEA region experienced a decline in investment flows on January and February 2016.

Regional trends

In the Americas, investment flows from already listed companies accounted for 96% of the total investment flows in the region. The value was up 14% on the same period in 2016. Investment flows through IPOs (though a small share of the total) were also up 344% on Jan and Feb 2016 (2016 being one of the worst years for IPO activity in the Americas since the recession). This resulted in a combined increase in investment flows as compared to the same period in 2016 of 28.5%

Most of this activity occurred on exchanges in the United States which accounted for 68% of the total investment flows in the region. This was against a backdrop of positive economic data with the Institute for Supply Management’s index climbing to 57.7 indicating the fastest expansion in manufacturing since August 2014 and the Consumer Confidence Index recording the highest level since July 2001. However, despite the increase on 2016, total investment flows were in fact down on the same period, going as far back as 2013. The total number of new companies listed in the region also was down on all years except 2016.

By contrast, in the Asia-Pacific region, the January and February 2017 investment flows through IPOs as well as already listed companies recorded the highest values when compared to the same period over the last 5 years, with the exception of investment flows through IPOs in 2014. This reflects the positive sentiment in the region driven by the growing manufacturing sector, expanding domestic demand and steady growth observed in China, India and other emerging markets in the region. Shanghai Stock Exchange, Shenzhen Stock Exchange and National Stock Exchange of India accounted for over 85% of the total investment flows in the region over this period in 2017. The total number of new listings in January and February 2017 were also the highest for the same period over the last 5 years.

The EMEA region however did not show the same uptick in investment flows as compared to the first two months of 2016. The investment flows through IPOs and already listed companies were both down 50% and 39% respectively on 2016. The investment flows through IPOs were the lowest over the same period for the past five years. Total investment flows for the region were also down on 2015 though up on 2014 and 2013, reflecting a pickup from the low baseline of investment flows during the same period in those two years. The European exchanges which accounted for over 95% of the total investment flows in the region in January and February 2017, are operating against a backdrop of ongoing uncertainty stemming from Brexit and upcoming elections across the region.

Jan & Feb 2017 investment flows through IPOs compared to:

Jan & Feb 2017 investment flows through IPOs compared to
% change on Jan/Feb 2013 Jan/Feb 2014 Jan/Feb 2015 Jan/Feb 2016
Americas -88% -45% -10% 344%
Asia-Pacific 75% -14% 27% 243%
EMEA -184% -56% -91% -50%
Total 2% -32% -42% 140%
 
Jan & Feb 2017 investment flows through already listed companies compared to
% change on Jan/Feb 2013 Jan/Feb 2014 Jan/Feb 2015 Jan/Feb 2016
Americas 0% -1% -35% 14%
Asia-Pacific 69% 128% 57% 42%
EMEA 6% 179% -18% -39%
Total 32% 93% 4% 1%
 
Jan & Feb 2017 total investment flows compared to
% change on Jan/Feb 2013 Jan/Feb 2014 Jan/Feb 2015 Jan/Feb 2016
Americas -11.8% -11.5% -32.5% 28.5%
Asia-Pacific 79.6% 95.4% 53.1% 50.5%
EMEA 0.3% 139.8% -33.3% -39.3%
Total 28.2% 65.6% -2.8% 6.3%
 

Volume traded (million trades)

 
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