Global stock markets lose $18tn to pandemic, says report

Over $18 trillion has been wiped out globally by the COVID-19 crisis between February and March 2020, even as capital markets maintained their role of facilitating the transfer of funds in the real economy.

In the first quarter 2020 and the full-year 2019 market financial report just released by the World Federation of Exchanges (WFE), WFE placed its 2019 full-year statistics side by side the statistics for Q1 2020, with the aim of helping to better understand the intensity of the shock the global economy has experienced over the last quarter and the challenges that markets have faced.

According to the WFE, more than $18 trillion globally were wiped out by the COVID-19 pandemic over the course of February and March 2020.

It noted that even in such a difficult time, markets kept playing their role, facilitating the transfer of funds in the real economy.

The global report is coming on the heels of a recent News Agency of Nigeria (NAN) report that the Nigerian capital market lost N1.71 trillion or 12.54 per cent with market capitalisation falling from N13.657 trillion on February 28 to N11.945 trillion as at close of trading on April 20.

But the WFE report stated that in the first quarter of 2020, the global number of initial public offerings (IPOs) and the amount of capital raised significantly increased from the first quarter of 2019.

In March, described as the most impacted month of the first quarter of 2020, the WFE still saw more than 70 IPOs worldwide, raising more than $5.5 billion in capital.

The financial report said at the end of Q1 2020, the domestic market capitalisation of all the regions amounted to $73.14 trillion, a 13.61 per cent decrease when compared to Q1 2019.

All regions were equally affected. While the Americas lost 17.28 per cent of its value, the Asia-Pacific region posted12.76 per cent and the EMEA region 7.11 per cent.

This is compared to Q4 2019 with a global decrease (-20.75 per cent), comprising the Americas (-22.18 per cent ), Asia-Pacific (17.48 per cent ) and EMEA (-22.79 per cent).

Global stock markets started 2019 against the backdrop of low market capitalisation figures in 2018.

As the year unfolded, however, the fears of a global economic slowdown receded and geopolitical and trade tensions showed some respite.

By the end of 2019, most indicators were positive. Domestic market capitalisation reached record high levels in markets across the globe and investment flows through IPOs substantially increased. On the downside, there were significant declines in new listings through IPOs.