The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has published its Full Year 2020 Market Highlights Report.
The report offers the first opportunity to study the impact of the events of 2020 on markets holistically and looks across market capitalisation, listed companies, IPOs, volumes and value traded in multiple asset classes including equities, derivatives futures, options and ETFs.
2020 was an extraordinary year in history, with the Covid-19 pandemic, the US presidential election, Brexit, the resignation of Japan’s prime minister Shinzo Abe and increased tension between the US and China creating vast economic uncertainty and a flood of pessimistic forecasts. In March we saw market volatility levels comparable only to those of the Great Financial Crisis of 2008.
What is remarkable is that markets remained open and functioning, despite the exceptional circumstances and even during the worst days of the crisis. In addition, after the peak in uncertainty observed in March, markets quickly recovered. By the end of July, most indicators registered a quick reversal to the activity levels seen before the pandemic, reflecting a strong confidence in the markets and in their role in supporting the economy.
Towards the end of the year, the news of the development and approval of several Covid-19 vaccines, the final agreement between the UK and the EU, and the outcome of the US elections seemed to have boosted the confidence of investors and issuers, driving markets to end the year on a high note.
Nandini Sukumar, Chief Executive Officer, the WFE says: “These numbers reflect how exchanges have continued to play an active and fundamental role in supporting their underlying economies even during this unprecedented year. While 2021 will remain volatile, and much remains unknown about how and when we will find our way through the pandemic, public markets remain open for those who need them, stand ready to finance inclusive growth and support those who seek to mitigate risk.’’
Dr Pedro Gurrola-Perez, Head of Research, the WFE, says: “At a time when many economic indicators are struggling to overcome the impact of the 2020 events, it is encouraging to see how swiftly market activity has recovered, reflecting a strong confidence in the markets and reaffirming the importance of their role in rebuilding the economies”
