The Association for Financial Markets in Europe (AFME) has today published its quarterly Equities Data Report. 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), equity liquidity structure, and market valuations.

Key findings include:

• Equity issuances on European exchanges accumulated an increase of 39% in the first three quarters of 2021 compared to the same period of 2020. However, following two exceptionally robust quarters, equity capital raising decelerated in 3Q 2021 to levels closer to historic volumes, with a decline of -46% QoQ. 
  •  IPOs for €52.8bn have taken place in the first three quarters of 2021, almost 5 times the amount issued in the same period of 2020. 
  • SPAC IPOs represented 11% of total European IPOs in Q3 2021, a decline from 15% in Q2 2021.
     
• Domestic market capitalisation of European listed shares stood at €16.8tn at the end of September 2021, a 18% increase from €14.2 at the end of 2020.
   
• European[1] Completed Mergers and Acquisitions (M&A) of European companies totalled €829bn in the first three quarters of 2021 a 60% increase from the amount completed in the same period of 2021 (€519bn). This represents the highest YtD volume since 2007.
  • The amount of announced M&A totalled €941bn in Q1-Q3 2021, a 81% increase from the same period of 2020. 
  • De-SPAC acquisitions represented 8% of the total announced European M&A in Q3 2021 (5% in Q2 2021). 86% of the announced SPAC acquisitions of European companies during Q1-Q3 2021 are De-SPACs of US-headquartered SPACs. These European companies will be effectively listed on US exchanges via their SPAC parent company. 
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• Average daily equity trading activity on European main markets and MTFs stood at €74.6bn in Q1-Q3 2021, 6% below the average daily observed in Q1-Q3 2020.
   
• Double Volume Cap (DVC) update: The number of instruments suspended under the DVC has recently increased to 380 at the EU or trading venue level as of October 2021 (from 205 in Dec-20).

European trading volume by trading mechanism

• The report also shows that the majority of equity trading in Europe (82%) takes place on venues[i]. A much smaller share takes place off-venue on alternative trading mechanisms known as systematic internalisers[ii] (SIs) which account for 10% of trading, and over the counter (OTC), which accounts for 8%. 
   
• The updated figures, sourced from BigXYT, continue to confirm the findings AFME published in June with consultancy, Oxera showing that when technical trades are filtered out of the full universe of reported equity transactions, a true picture of economic trading activity is revealed. While technical trades, such as those undertaken out of hours or that are not price-forming, are informative from a supervisory perspective, they have no relevance when conducting an analysis of the trading and liquidity landscape. 
   

AFME’s quarterly data report will continue to track the share of European trading volume by trading mechanism going forward. 
 

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