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:
Cash equity
Exchange-traded derivatives
Other Products
Re-disseminated by The Asian Banker