Global growth
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While global market capitalization rose to record heights in the past year, and trading volumes increased too, the weakness in new-issue activity should be regarded as a warning to policymakers, says the World Federation of Exchanges (WFE).

According to new data from the global trade group for the exchange industry, in 2024, initial-public-offering (IPO) activity dropped to its lowest level in five years.

The weakness in new-issue activity came even as global equity market capitalization rose by 13.4% year-over-year to US$125.7 trillion in 2024, led by growth in the Americas and Asia-Pacific regions.

The Americas region, which was up 24%, hit record highs, driven primarily by large technology companies, the WFE said.

At the same time, global trading volume was up by 15.5% in 2024, the group reported.

Yet, despite these trends, global IPO activity declined in 2024, the WFE said — due mainly to the Asia-Pacific region, “which raised the lowest amount in the last five years despite hosting the largest IPO globally,” it noted.

Against this backdrop, the group said the weakness in IPO activity, “should ring alarms and highlights the need of policy action to support capital markets and reverse this trend.”

“Investors turn to public markets to finance the future,” said Nandini Sukumar, CEO of the WFE, in a release.” As we start 2025, it’s crucial for new governments and policymakers worldwide to reaffirm their commitment to keeping these markets dynamic. We need to see policies that not only foster investment in transparent, well-regulated markets, but also empower and encourage businesses to list and access essential capital for growth.”

Exchange-traded derivatives up sharply

Alongside the strength in equity markets, the data also showed trading in exchange-traded derivatives rose by 38.8% in 2024, driven mostly by options trading, which was up 47.7% year-over-year.

“Equity derivatives increased their share in volumes traded, while currency, commodity, interest rate and ETF derivatives decreased their share in 2024,” the report said.

The WFE also reported that the number of listed ETFs rose by 15%, and the value of ETFs traded was up 17% in 2024.

“Looking ahead, geopolitical tensions will remain a key driver of capital markets, with any escalation or de-escalation shaping business confidence, IPO activity and investor sentiment,” the report said.

In the short term, shifting U.S. policy “will be a major influence on market performance, with wide-reaching implications for global trading patterns,” it said.

Longer term, tech innovation is expected to, “play an increasingly transformative role in market dynamics,” the report said. “As innovation reshapes industries, we are already seeing shifts in market composition, with technology stocks poised to extend their gains if capital allocation to the sector remains strong.”