The year 2020 was a fantastic year for stock trading in China, with the total market cap of the country’s stock markets reaching an all-time.
According to data presented by TradingPlatforms, the combined market cap of China’s stock market jumped by 33% year-over-year to 79.7 trillion yuan or $12.4trn in 2020, the highest value in the country’s history.
Market Cap Surged by 83% in Two Years
Over the last four decades, China has experienced an incredible growth rate. Along with impressive economic achievements, the country also witnessed the rapid development of its financial system.
Nevertheless, China’s financial reform is still in process in many directions, developing domestic financial markets, promoting bond and equity markets, liberalizing exchange rates and capital accounts, and improving financial regulation.
One crucial aspect of the financial market development strategy in the country was the fostering of innovation. In recent years, China had the problem that upcoming domestic tech companies preferred to list on overseas stock markets. So, Shanghai Stock Exchange and Shenzhen Stock Exchange, as the two major stock exchanges in Mainland China, established boards with more lenient listing requirements, allowing even startups that had not yet turned a profit to gain access to the financial market.
As a result, the market capitalization of the country’s stock market increased significantly. Between 2014 and 2017, the market cap of China’s stock market jumped by 52%, reaching 56.7 trillion yuan or $8.8trn that year, revealed the China Securities Regulatory Commission data.
After a drop to $6.7trn in 2018, the market cap jumped by 37% YoY to $9.2trn in 2019. However, statistics show that last year witnessed the biggest annual growth, with China’s stock market reaching $12.4trn value, an impressive 83% increase in two years.
Trade Revenue Surged by 62% in a Year
Mainland China has two major stock exchanges. The first one is the Shanghai Stock Exchange that consists of the Main Board and the Star Market. The companies listed on the Main Board are mature and established in their industries, while the Star Market targets innovative startups.
The other major stock exchange is the Shenzhen Stock Exchange, separated into three boards, the Main Board, the SME Board and ChiNext Market.
Besides impressive growth of total market capitalization, China’s stock markets also witnessed a surge in trade revenue last year. In 2020, China’s stock market generated a revenue of over 206 trillion yuan or nearly $32trn, a massive 62% increase in a year. Still, this was 12% less than the trade revenue generated in 2015, as the record year in the country’s history.
African Development Bank Launches AUD$600 Million (USD$463.9 million) Kangaroo Social Bond
The African Development Bank launched a A$600 million (US$463.9 million) 5.5-year Kangaroo bond, marking its return to the Australian dollar bond market.
The transaction, announced on 8 June, was led by Nomura and RBC Capital Markets. It is the institution’s first benchmark Kangaroo since early 2018 and its first in the mid-curve since 2015. It is also the largest AUD trade ever issued by the Bank. More than 30 investors participated in the deal, with a total order book of more than A$775 million, leading to an upsize of the trade from the announced size of A$250-300 million to the final size of A$600 million. These included a strong cohort of Australian investors, while fund managers were the major investor type.
African Development Bank Treasurer Hassatou N’sele said the Covid-19 pandemic had led to a rise in global issuances of social bonds.
“Following on from the ground breaking USD$3.1 bln 3 year ‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD”.
The African Development Bank’s social bonds have use of proceeds allocated to projects that alleviate or mitigate social issues such as improving access to electricity, water and sanitation, and improving livelihoods through flood-risk reduction and access to clean transportation and employment generation.
Recent KangaNews data show that the African Development Bank had A$1.75 billion of bonds mature between its 2015 benchmark deal and its most recent. Keith Werner, Manager of Capital Markets and Financial Operations, said 38 per cent of investors in the deal had a socially responsible investment approach and that the African Development Bank intends to issue more social bonds in Australian dollars.
“In addition to the important contribution that socially responsible investors had to the success of this trade, it’s also gratifying to see such a large portion of the investors (41%) were domestic, which is an area where we haven’t seen strong support historically. We look forward to leveraging this momentum and continue evaluating opportunities in the future in this market”, Werner said.
The Australian dollar is the fifth currency in which the African Development Bank has issued social bonds since it established the program in 2017, following deals in euros, US dollars, Norwegian kroner and Swedish kronor.
In December 2016, the African Development Bank launched its inaugural Kangaroo Green Bond. This transaction followed successful outings in USD and SEK Benchmark formats.
A Kangaroo bond is a foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to the securities regulations of Australia. A Kangaroo bond is also known as a “matilda bond.”
Stock Market Gains N230 Billion Last Week
The Nigerian Exchange Limited gained N230 billion last week as more stocks closed in the green.
The market value of listed stocks and the Nigerian Exchange Limited All-Share Index expanded by 1.11 percent to close the week at N20.41 trillion and 39.156.28 index points, respectively.
Investors traded 1.06 billion shares valued at N12.8 billion in 17,854 transactions during the week, against a total of 1.08 billion shares worth N9.55 billion were traded in 17,933 transactions in the previous week.
In terms of volume traded, the financial services industry led the activity table with 714.677 million shares estimated at N5.95 billion traded in 9,718 transactions. Therefore, contributing 67.53 percent and 46.38 percent to the total equity turnover volume and value traded, respectively.
This was followed by the consumer goods industry with 97.18 million shares estimated at N3.29 billion in 3,006 transactions.
In third place was the ICT industry with a turnover of 75.99 million shares valued at N583.72 million in 679 deals.
The top three most traded stocks (measured by volume) were Zenith Bank Plc, Sterling Bank Plc and Fidelity Bank Plc. The three accounted for 261.34 million shares valued at N2.71 billion and traded in 2,862 deals. The top three most traded equities in the week contributed 24.70 percent and 21.13 percent to the total equity turnover volume and value.
During the week, 35 stocks closed in the green, against 33 posted in the previous week. A total of 36 equities rose as against 33 equities in the previous week, while 89 equities remained unchanged as against 94 in the previous week.
Nigerian Equities Market Establishes Bullish Trend
The equities market in Africa’s largest economy, Nigeria, extended its bullish trend on Thursday as the Exchange closed in the green amid rising renewed interest in the market.
Investors traded 158.366 million shares valued at N2.236 billion in 3,330 transactions during the trading hours of Thursday.
The Nigerian Exchange Limited All-Share Index gained 0.10 percent to close at 39,210.1 index points while the market value of all stocks grew to N20.437 trillion on Thursday.
The renewed interest followed weeks of bearish trends that trailed the market amid a broad-based profit-taking that encompasses the market after a prolonged bullish trend recorded in 2020 and Q1 2021 despite COVID-19.
Link Assurance led gainers with 9.09 percent to settle at N0.60 per share. This was followed by PZ’s 7.14 percent to close the day at N6 per share. See the details below.
|LINKASSURE||N 0.55||N 0.60||0.05||9.09 %|
|PZ||N 5.60||N 6.00||0.40||7.14 %|
|CHAMS||N 0.20||N 0.21||0.01||5.00 %|
|MAYBAKER||N 4.00||N 4.20||0.20||5.00 %|
|UNILEVER||N 12.10||N 12.70||0.60||4.96 %|
|CWG||N 1.25||N 1.13||-0.12||-9.60 %|
|CHIPLC||N 0.78||N 0.71||-0.07||-8.97 %|
|ABCTRANS||N 0.40||N 0.37||-0.03||-7.50 %|
|WAPIC||N 0.59||N 0.55||-0.04||-6.78 %|
|MBENEFIT||N 0.46||N 0.43||-0.03||-6.52 %|
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