The economic effect of the coronavirus disease has resulted in a loss of over $18tr between February and March 2020, even as capital markets maintained their role of facilitating the transfer of funds in the real economy.
In the just released first quarter of 2020 and the full year 2019 market financial report, the World Federation of Exchanges 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 $18tr was wiped out globally by COVID-19 in February and March.
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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 News Agency of Nigeria report that the Nigerian capital market lost N1.71tr (12.54 per cent) with market capitalisation falling from N13.657tr on February 28 to N11.945tr at the close of trading on April 20.
But the WFE report stated that in Q1 2020, the global number of Initial Public Offerings and the amount of capital raised significantly increased from Q1 2019.
In March, described as the most impacted month of Q1 2020, the WFE still saw more than 70 IPOs worldwide, raising more than $5.5bn in capital.
The financial report said at the end of Q1 2020 that the domestic market capitalisation of all the regions amounted to $73.14tr, 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 posted 12.76 per cent and the Europe, the Middle East and Africa 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.
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