China trading surge helped fuel 2014 global stock rally: WFE

Monday, 9 March 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: 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% last year, compared with 2013, at $ 81 trillion, according to the WFE, a trade association for the operators of regulated financial exchanges. Trading values were up 18.9% 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% 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%, while trading in the Americas was up 16.5%, 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%, while the EURO STOXX 50 volatility index surged 51.8%. The volatility was driven, in part, by data showing an improving US economy, while the US Federal Reserve emphasised 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% globally, with the Americas up 30.8%, Asia-Pacific up 21%, and EMEA up 13%. More companies responded to the rally in stocks by going public, with initial public offerings up 24.3% 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.”

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index

Reuters: Stock market index provider FTSE Group has added Bosch and raised the shares of eight other Indian companies, including Yes Bank, to large-caps from mid-cap earlier in its Asia Pacific ex-Japan index. FTSE’s changes, which came after a semi-annual review of indices, may lead to net inflows of nearly $ 150 million in Indian shares and may help soothe worries about huge India overweight positions after a potential rise in the country’s weighting by peer MSCI, traders said. The Government’s budgetary proposal to make no distinction between foreign direct investment and foreign portfolio investment is expected to raise India’s weight in MSCI indexes. Companies often see demand for their shares rise or fall after promotion or exclusion from indices, primarily due to funds tracking the indices in question or using them as benchmarks, analysts say. FTSE’s move, which will be effective after market close on 20 March, also includes Eicher Motors, Motherson Sumi Systems, Zee Entertainment Enterprises, Godrej Consumer Products, Aurobindo Pharma, Shree Cement and Cadila Healthcare. In its review, FTSE also upgraded India’s consumption related stocks such as Pidilite Industries, Britannia Industries and Marico to mid-cap series from small-cap earlier.