Equities, fixed income and derivatives markets in Q1, 2017

By: The WFE Research Team Apr 2017

This article reviews the equities, fixed income and derivatives markets in Q1 2017. Global and regional shifts relative to Q1 2016 have been analysed for key indicators across all asset classes.

Equities markets

  • Domestic Market Capitalisation: As at end Q1 2017, domestic market capitalisation was over 72.3 trillion USD, up 13% on end Q1 2016. Market capitalisation was up across all regions – Americas (14%), the Asia-Pacific region (15%) and the EMEA region (9%).
  • Number of listed companies: There was a marginal decline of 0.04% in the number of listed companies in Q1 2017 when compared to Q1 2016. While there was a pickup in the Asia-Pacific region (up 2%), there was a drop in the listings in Americas (down 2.1%) and EMEA (down 3%) region.
  • Volume and value of shares traded: Overall the volume and value of shares traded in Q1 2017 were down 15% and 14.3% respectively on Q1 2016. This decline in volume and value traded occurred across all the three regions. In the Americas, Asia-Pacific and EMEA regions: 
    - The number of trades in equity shares was down 25%, 8.5% and 8.7% respectively
    - The value of shares traded was down 15.4%, 12.8% and 13.2% respectively
    These declines were driven predominantly by the falls in January and February 2017, relative to 2016, but there was pickup in value and volume of shares traded month-on-month across all regions in March 2017.
  • Investment flows: In line with the trends reported in the February edition of the ‘Insights and Analysis’, overall there was a 7% increase in the investment flows through IPOs and already listed companies when compared Q1 2016. A 28.6% decline in investment flows in the EMEA region was offset by the uptick in the Americas (up 13.7%) and the Asia-Pacific (up 31.4%) region. Investment flows through already listed companies accounted for a major share (87%) of global investment flows.
  • Exchanges traded funds (ETFs) have seen a slight increase in the total number of listings (up 7.1%) on Q1 2016. However, both value and volume of trades in ETFs were down by 29.8% and 35.3% respectively on Q1 2016, due to the sharp fall in these indicators across all three regions.

Fixed Income Market

  • Among the exchanges that report fixed income data, there was a 6% uptick in the total value of bonds traded and sharp increase of 26% in the volume traded on Q1 2016. 
    This increase in value traded was experienced across all regions – Americas (up 1%), Asia-Pacific (up 16%) and EMEA region (up 5%) respectively. Meanwhile a 4% decline in the volume traded in the Americas, was offset by the 35% and 24% increase in the Asia-Pacific and EMEA region respectively.
  • The number of bonds listed was down 7% reflecting the decline in listings in the Americas (down 5.2%) and the EMEA (down 14.7%) regions respectively. Only the Asia-Pacific region saw a 14.2% pickup in the number of bonds listed.

Derivatives Market

  1. Volumes traded of single stock options and futures were up 1% on Q1 2016, with the Americas (up 1.6%) and the Asia-Pacific regions (up 14.7%) driving this increase.
  2. Stock index options and futures volumes were down 10% on Q1 2016, with declines in volumes traded across all three regions.
  3. Interest rate derivatives volumes were up by 13% on Q1 2016, driven by the increase in the Americas region (up 13.9%) which accounts for over 91% of the volume traded.
  4. Currency derivatives volumes traded fell by 18% when compared to Q1 2016. The increase in the Americas (3%) was offset by declines in the Asia-Pacific (down 14%) and EMEA (down 31%) regions.
  5. Commodity derivatives recorded a sharp fall of 25% on the volume traded in Q1 2016. Although there was an increase in volume traded in the Americas and the EMEA regions, a 35% decline in volume traded in the Asia-Pacific region (which accounts for 63% of volume traded) pulled down the total volumes.