US $ 18tn wiped off from global markets in first half of 2022, WFE data reveals

The 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 percent when compared with the previous six-month period, with all global regions experiencing decreases of similar proportions.  A total of more than US $ 18 trillion was wiped off from global markets in the first six months of 2022.

The number of IPOs plunged 52 percent over the same time period and the capital raised through IPOs fell by 62 percent.  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 percent (the Americas) and 16 percent (EMEA).  The value traded increased by 17 percent and 13 percent, respectively compared with the last six months of 2021. In the Asia Pacific region (APAC) the number of trades decreased marginally by 2.98 percent but the value traded decreased by around 23 percent.

The WFE report also reveals that the number of exchange-traded derivatives contracts reached its highest level in the last five years, totalling US $ 39.37 billion – an increase of 17.2 percent on figures from the second half of 2021. WEF CEO Nandini Sukumar 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.”

WEF Head of Research Dr. Pedro Gurrola-Perez 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.”