A report published by the World Federation of Exchanges (WFE) on Thursday 11th August, revealed that a total of $18 Trillion had been wiped off the global markets in the first half of 2022.
The report by the industry association for global exchanges and clearing houses shows a sharp retraction in market capitalisation of approximately 15% from the previous six-month period.
During the first six months of the year, the number of IPOs plummeted by 52% from the previous six months. Meanwhile, the capital raised through IPOs plunged by 62%.
However, it was not all doom and gloom. Trading activity in the Americas and EMEA (Europe, the Middle East and Africa) increased significantly. When comparing to H2 2021, these regions saw volumes rise 26% and 16%, whilst value traded rose 17% and 13%, respectively.
In APAC (Asia Pacific region) the number of trades only inched 2.98% lower, however, the value traded decreased by 23%.
Elsewhere in the report, WFE data revealed that the number of exchange -traded derivatives contracts hit 39.37 billion, which is its highest level in the last five years and an increase of 17.2% from the second half of last year as well as a 34.8% overall annual increase.
Equity (24%), currency (27.9%) and ETF (32%) derivatives saw solid increases from H2 2021. Although on an annual basis, the figures look even better, 53.8%, 35.4% and 36.5%, respectively.
Global Economy Yet to Recover from COVID-19
The soft data from the WFE lays bare the impact COVID-19 and the Ukraine war are having on the global economy.
Nandini Sukumar, the 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, the Head of Research at the WFE, added: "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.”
