$18 Trillion Wiped Off Global Markets in First Half of 2022, WFE Data Reveals
World Federation of Exchanges Report Sheds Light on “Period of Extreme Uncertainty”
London, 11 August 2022 – New data published by the World Federation of Exchanges (WFE), the global industry group for exchanges and central clearing counterparties, lays bare the full economic impact of the Ukraine war upon a global economy still trying to recover from the Covid-19 pandemic.
The WFE’s Market Highlights report for the First Half of 2022 reveals a sharp retraction in market capitalisation of around 15% when compared with the previous six-month period, with all global regions experiencing decreases of similar proportions. A total of more than $18 trillion was wiped off global markets in the first six months of 2022.
The number of IPOs plunged 52% over the same time period and the capital raised through IPOs fell by 62%.
There are some glimmers of hope, however. Trading activity in cash equities increased in the Americas and in the EMEA region, which groups Europe, the Middle East and Africa, during that time, by 26% (the Americas) and 16% (EMEA). The value traded increased by 17% and 13% respectively compared with the last six months of 2021. In the Asia Pacific region (APAC) the number of trades decreased marginally by 2.98% but the value traded decreased by around 23%.
The WFE report also reveals that the number of exchange-traded derivatives contracts reached its highest level in the last five years, totalling $39.37 billion – an increase of 17.2% on figures from the second half of 2021.
Nandini Sukumar, Chief Executive Officer at the WFE, said: “Growth prospects were already subdued as the tragic Ukraine conflict caused major disruption in the energy and commodity markets. This combined with global economies already struggling to recover from the pandemic has led to a perfect storm that has hit growth prospects hard.”
Dr Pedro Gurrola-Perez, Head of Research at the WFE, said: “Our new data indicates a severe market capitalisation retraction, a decrease in the number of newly listed companies, and a decline in the investment flows through IPOs. While this report does indicate extreme uncertainty, it is important to note that trading activity in cash equities increased and, overall, volumes in exchange-traded derivatives rose.”
Some highlights from the report:
Domestic market capitalisation decreased about 15% when compared to the previous six-month period, with all regions experiencing decreases of similar proportions. Overall, more than USD 18 trillion have been wiped off from the markets in the first six months of 2022.
Trading activity increased significantly in the Americas and EMEA. In these regions volumes increased by 26% and 16%, while value traded increased by 17% and 13%, respectively (compared with H2 2021). In APAC the number of trades decreased marginally but the value traded decreased by about 23%.
The average trade size was at its lowest level compared with the previous period (at USD 3,259.41 /trade).
The number of IPOs and the capital raised through IPOs2 saw a massive decrease relative to H2 2021 (-53% and -62%, respectively), and to H1 2021 (-48% and -65%, respectively).
The number of exchange-traded derivatives contracts reached its highest level in the last five years, amounting to 39.37 billion (24.74 billion options contracts and 14.63 billion futures contracts traded in H1 2022). This represents a 17.2% increase compared to H2 2021, and a 34.8% increase year-on-year.
While commodity options volumes increased by about 24% (relative to the previous six-month period), commodity futures decreased by about 22%.
Equity, currency, and ETF derivatives witnessed double digit increases when compared to H2 2021 (24%, 27.9% and 32%, respectively), and year-on-year (53.8%, 35.4% and 36.5%, respectively).
Interest rate derivatives increased 13.6% compared to H2 2021 and 9.3% year-on-year.
While the number of listed exchange-traded funds (ETFs) increased only by 5% when compared to H2 2021, the ETF value traded increased significantly (40%).
The number of listed securitised derivatives (SD) went slightly up compared to H2 2021 and year-on-year (about 3% in both cases). However, the value traded declined when compared to H2 2021 and year-on-year (-5% and -17%, respectively), due to declines in every region.
The number of listed investment funds (IF) declined significantly in APAC relative to H2 2021 (-27%) while it increased in the Americas (13%).
You can download a copy of the report here.
About the World Federation of Exchanges (WFE):
Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 35% are in Asia-Pacific, 45% in EMEA and 20% in the Americas. WFE’s 57 member CCPs collectively ensure that risk takers post some $1 trillion (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to 47,919 listed companies, and the market capitalisation of these entities is over $109 trillion; around $137 trillion (EOB) in trading annually passes through WFE members (at end 2020).
The WFE is the definitive source for exchange-traded statistics and publishes over 350 market data indicators. Its free statistics database stretches back more than 40 years and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system.
With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.