Global Equity Market Sees $13 Trillion Surge in Capitalization in 2023: WFE Report

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A recent publication from the World Federation of Exchanges (WFE) unveils a substantial uptick in global equity market capitalization, soaring by 13 percent or over $13 trillion throughout 2023. This notable surge, as reported in the 2023 Market Highlights, showcases the resilience and growth of global financial markets despite various challenges faced during the year.

Although the overall market capitalization witnessed a significant boost, the report indicates a decline in trading value and volumes by 10.6 percent and 3.4 percent, respectively, compared to the previous year. Notably, all regions reported their lowest annual trading values in the last three years, reflecting shifting market dynamics and external factors impacting trading activities worldwide.

Contrary to the global trend, the Nigerian equity market stood out with a remarkable appreciation of 46.6 percent or N13 trillion in market capitalization over the course of last year, demonstrating a robust performance amidst broader market trends.

According to the WFE, the average trade size hit a three-year low, standing at $2,776.45 per trade. Additionally, the report highlights notable trends in non-IPO listings across regions, with the Americas and EMEA regions reporting their minimum levels in the last three years, while the APAC region recorded its maximum. The capital raised through already listed companies reached its lowest levels across regions, with IPO activity also experiencing a decline, welcoming only 1,217 IPOs in 2023, the lowest in three years.

Moreover, the report notes a significant decrease in capital raised through IPOs compared to the previous year, with the APAC and EMEA regions witnessing declines of -43.3 percent and -86.1 percent, respectively, while the Americas saw a substantial increase of 71.3 percent.

Despite these declines, global markets witnessed the listing of five unicorns in the second half of the year, in addition to the three unicorns listed in the first half, showcasing resilience and opportunities in the market.

Meanwhile, the number of exchange-traded derivatives contracts, including options and futures, reached its highest level in three years, totaling 104.06 billion for options and 30.33 billion for futures, representing a 58.9 percent increase compared to 2022. Options, in particular, drove this increase, rising by 89.4 percent and accounting for 77 percent of all derivatives contracts traded, while futures saw a more modest increase of 2.4 percent.

The report’s findings underscore the dynamic nature of global financial markets, characterized by both challenges and opportunities, and highlight the importance of adaptive strategies and informed decision-making in navigating evolving market conditions.

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