ASX’s Sees Capital Exodus in January, Underpinned by Market Weakness

The ASX saw its capital raising virtually come to a standstill in January, as reflected by a -96.6% MoM decrease

The Australian Securities Exchange (ASX) has announced the release of its monthly activity report for the month ending January 2016, which was characterized by a widespread retreat in several of its key benchmarks and indices, according to an ASX statement.

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In January 2016, the value of ASX-listed stocks, as measured by the global All Ordinaries Index, could not sustain its recent growth, instead faltering by a factor of -5.4% MoM – this downward performance was also shared amongst other leading market blocs, notably Germany (-8.8%), Japan (-8.0%), the United States (-5.1%), and Hong Kong (-10.2%).

In addition to the deteriorating levels of capital on the exchange, the ASX’s monthly performance came in tandem with a rise of volatility in January 2016, with its volatility, as calculated by the All Ordinaries Index, holding edging higher to 1.0% in January 2016 from just 0.8% in December 2015.

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Exchange Specifics

In terms of the ASX’s market specifics, the exchange managed to raise a total of $0.3 billion in January 2016, down a staggering -96.6% MoM from $8.7 billion in December 2015. Across its initial capital raise, the exchange raised just $37 million during the month of January 2016, down -98.6% MoM from $2,565 million in December 2015.

The total value of cash markets for the ASX during January 2016 was $81.4 billion, down -10.3% MoM from $90.7 billion in December 2015 – this result did correlate to a 4.6% increase YoY from $77.8 billion in January 2015, one of the ASX’s lone bright spots for the month.

The ASX recent futures performance evaporated in January 2016 snapping two consecutive monthly rises in futures volumes. Indeed, the ASX witnessed a total of just 9.0 million futures contracts traded during January 2016, down -23.1% MoM from 11.7 million contracts in December 2015. The figures were inverted over a yearly timeframe, encapsulating an increase of 1.1% YoY from 8.9 million contracts in December 2015.

Finally, the notional value of over-the-counter (OTC) interest rate derivative contracts centrally cleared during January 2016 was $154.5 billion, good for a boost of 48.5% MoM from $104.0 billion in December 2015, essentially negating last month’s weak performance.

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