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 $18 trillion have been wiped off from the markets in the first six months of 2022, according to the World Federation of Exchanges Report.
The number of IPOs plunged 52% over the same time period and the capital raised through IPOs fell by 62%.
The average trade size was also at its lowest level compared with the previous period (at USD 3,259.41 /trade).
The report noted that there “are some glimmers of hope.” Trading activity in cash equities increased in the Americas and in Europe, the Middle East and Africa (EMEA), during that time, by 26% and 16%, respectively.
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 dropped 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.
Equity, currency, and ETF derivatives witnessed double digit increases when compared to H2 2021 -24%, 27.9% and 32%, respectively – and year-on-year at 53.8%, 35.4% and 36.5%, respectively..
Interest rate derivatives also rose 13.6% compared to H2 2021 and 9.3% year-on-year.
“Growth prospects were already subdued as the tragic Ukraine conflict caused major disruption in the energy and commodity markets,” said Nandini Sukumar, chief executive officer at the WFE. “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.”