The Business Times

China trading surge helped fuel 2014 global stock rally: WFE

Published Tue, Mar 3, 2015 · 09:16 AM

[NEW YORK] The Asia-Pacific region led a surge in stock trading volumes on financial exchanges globally in 2014 as the value of trading in mainland China rose in the fourth quarter and volatility helped boost activity in Europe and the Americas, the World Federation of Exchanges said on Tuesday.

The value of equity trading was up 17.4 per cent last year, compared with 2013, at US$81 trillion, according to the WFE, a trade association for the operators of regulated financial exchanges.

Trading values were up 18.9 per cent in the Asia Pacific region, mainly due to an increase in the value of share trading in mainland China toward the end of the year, according to the WFE, which has 64 member exchanges.

Stocks in China ended 2014 near a five-year high, with mainland markets up more than 50 per cent as Beijing pushed to convince Chinese investors to stop speculating on real estate and diversify into shares in Chinese companies.

Trading in Europe, the Middle East and Africa rose 17.4 per cent, while trading in the Americas was up 16.5 per cent, driven by a significant increase in volatility, the WFE said.

The CBOE volatility index, which measures the cost of protection against a drop on the S&P 500 index, rose by 39.9 per cent, while the EURO STOXX 50 volatility index surged 51.8 per cent. The volatility was driven, in part, by data showing an improving US economy, while the US Federal Reserve emphasized it would be patient about raising interest rates as concerns surfaced over the rest of the global economy, and energy prices declined.

The number of stock trades was up 23.7 per cent globally, with the Americas up 30.8 per cent, Asia-Pacific up 21 per cent, and EMEA up 13 per cent.

More companies responded to the rally in stocks by going public, with initial public offerings up 24.3 per cent globally.

"The numbers illustrate that investor demand for financing and ways to transfer risk continue to grow," said Nandini Sukumar, acting chief executive officer of the WFE. "Exchanges are - and will remain - the natural place for both those needs."


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