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

 

This article is a roundup of the developments in the equities, derivatives and bond markets in Q3 2017. Global and regional shifts in Q3 2017 relative to Q3 2016 have been analysed for key indicators across various asset classes, as follows:

Equities market

  • Overall domestic market capitalisation displayed a sustained increase continuing the trend observed in H1 2017. It was up 17.2% when compared to end Q3 2016, driven by increases in the domestic market capitalisation across all three regions. The Americas were up 15.9%, Asia-Pacific up 16.8% and the EMEA region up 20.1%. Declines were largely concentrated in the Middle-East.
  • The number of listed companies was up 1.1% on end Q3 2016. While the Americas and the EMEA regions recorded marginal declines in listings of 0.4% and 0.6% respectively, the Asia-Pacific region saw listings increase by 2.6%.
  • The total value of share trading (EOB) over Q3 2017 was up 5% on the same period in 2016. This was due to an increase in turnover in all three regions: the Americas was up 1.9%, Asia-Pacific up 6.5% and the EMEA region up 12.7%.
  • Number of trades in equity shares (EOB) were up 1.4% in Q3 2017 on the same period in 2016. While the volume traded in the Americas declined by 10.9%, the Asia-Pacific and EMEA regions saw the number of trades increase by 6.6% and 8.4% respectively.

Other products

  • Investment Funds: Overall, investment funds have witnessed a slowdown in activity:
    • Listings were down 11% due to declines in the Asia-Pacific (down 15%) and EMEA regions (down 12%), which together account for over 90% of the listings.
    • The total value and volume of investment funds traded were down 29.6% and 43.1% respectively. The decline in value traded was due to falls in turnover in the Asia-Pacific and EMEA regions (by 56.1% and 20.6% respectively). The Americas region, which accounts for about 50% of the global turnover, saw value traded increase by 29.9% on Q3 2016. Although the number of trades fell in all regions, the significant decline in trading was largely due to the 64.5% decline in the number of trades in the Asia-Pacific region (which accounts for 41.3% of trades).
  • ETFs: ETF listings were up 5% on Q3 2016 due to increases in all regions. Total volumes and value traded were down 10.6% and 9.7% respectively, driven largely by declines in the Americas region (down 16.4% and 11.2%) which accounts for over 80% of the ETF trades and turnover.

Fixed Income

Total number of bonds listed at the end of Q3 2017 was up 4% due to increases in listings across all regions. Listings in the Americas region were up 1.8%, the Asia-Pacific region was up 10.1% and the EMEA region up 1.9%. Capital raised through bond issuance was also up with an increase of 18% on Q3 2016, driven by increases in all regions.

Derivatives

  • The number of single stock options and futures contracts traded were up 7.1% largely driven by sharp increases in the Asia-Pacific region (up 44%) which accounts for 23% of volume traded. The Americas, where over 60% of the volume is traded, experienced a decline in volume of 0.5%.
  • Volumes of stock index options and futures traded increased by 20.2%, driven by increases in the Americas and Asia-Pacific region. These two regions together account for over 80% of the volume traded (up 13.1% and 41.2% respectively). In the EMEA region volumes were down 8.6% on Q3 2016.
  • Interest rate derivatives volumes were up 15.7% in Q3 2017 over Q3 2016. All three regions recorded an increase in volume traded: Americas up 13%, Asia-Pacific up 18.7% and EMEA up 20.5% on Q3 2016.
  • Currency derivatives volumes were up 12.3% on Q3 2016. The Americas and the Asia-Pacific regions, where 70% of the contracts are traded, saw volume traded increase by a significant 28% and 29.7% respectively. The EMEA region, on the other hand, saw volumes decline by 13.7% on Q3 2016.
  • The number of commodity derivative contracts traded during this period increased slightly (by 0.8%). In the Asia-Pacific region, where about 60% of the trades occur, volumes were down by 7.2%. This decline was offset by increases in volume traded in the Americas and EMEA regions of 17.1% and 14.3% respectively.
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