AFME Equity Primary Markets and Trading Report Q2 2020 | AFME

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AFME Equity Primary Markets and Trading Report Q2 2020
12 Aug 2020
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Julio Suarez Director

AFME is pleased to circulate its Equity Primary Markets and Trading Report for the second quarter of 2020 (Q2 2020).

The report provides an update on the performance of the equity market in Europe in activities such as primary issuance, Mergers and Acquisitions (M&A), trading, and equity valuations

 

Key highlights:

 

  • Equity underwriting on European exchanges accumulated a total of €78.6 bn proceeds in the first half of 2020 (1H 2020), an increase of 22% YoY from the value originated in 1H 2019 (€64.4 bn).

Follow-on offerings rose 50% YoY, the largest 1H amount since 2017.

IPO proceeds decreased 59% YoY, with the lowest 1H number of IPOs since 2009.

  • Completed Mergers and Acquisitions (M&A) of European companies totalled €331.2bn in 1H 2020 a 24% decrease from the amount completed in 1H 2019 (€433.3bn).

The decline in completed M&A activity was driven predominantly by a reduction in cross-border deals (i.e. with companies located outside Europe).

The amount of announced M&A totalled €315.5bn in 1H 2020 a 21% YoY decrease from the same period of 2019.

  • Average daily equity trading activity on European main markets and MTFs rose 28% YoY in 1H 2020.
  • Domestic market capitalisation of European listed shares stood at €12.3tn at the end of June 2020, a 15% YtD decrease from €14.5 at the end of 2019.

 

Update on MiFID II dark trading caps: The European Double Volume Cap (DVC) mechanism seeks to limit the amount of dark trading of equity-like instruments on EU venues.

ESMA publishes on a monthly basis the list of instruments temporarily banned from dark trading at the EU or trading venue level after their trading volumes surpass pre-determined dark trading thresholds.

As of July 2020 there were 317 instruments suspended from dark trading at the EU or trading venue level, which represents c1% of the Universe of equity-like instruments on ESMA’s July DVC files (27,208 equity or equity-like instruments). The number of instruments banned from dark trading has stabilised in recent months at between 300-400 (from above 1,200 in August 2018).

 

1H 2020 variation of European Equity activity EU27 member countries, UK and Switzerland