Cash equity trades see big pick-up

Johannesburg  - JSE trading statistics for May 2010 show that the number of cash equity trades that took place during the first five months of this year is up 23.9% to 10.1 million compared with 8.2 million for the same period in 2009. 

Last month, three new trading records were set on the exchange as global uncertainty and volatility increased.

The first record - of 184 336 trades - was set on 5 May, only to broken again two days later when 189 253 trades were recorded on the exchange.

The third record was set by trade during the week of 3 May. During that week, a record 751 381 trades took place, topping the previous record of 535 883 set in October 2008 in the midst of the global financial crisis.

"This record trading week was prompted by increased global uncertainty.

"Fear in the market place leads to increased volatility and increased trading activity," said Leanne Parsons, Head of Equities Trading at the JSE.

On the JSE's equity derivatives market, volumes of futures contracts traded rose 6.8% to 51.3 million during the first five months of 2010 compared with the previous period's 48.1 million.

The number of futures contracts traded in May alone was 6.8 million.

"This year-on-year growth is pleasing," commented Allan Thomson, head of Derivatives Trading at the JSE.

Also notable is that trade in index futures increased 101% year-on-year off a low base.

The number of commodity futures contracts traded on the JSE's commodity derivatives market increased by 8.4% to 662 000 in the first five months of 2010 compared with the same period in 2009's 610 000.

In the same period, volumes traded in commodity options have grown 26.8% year-on-year. 

In the JSE's interest rate market, cash bond volumes remain stable with volumes reported to the exchange in the month of May slightly below R1.4 trillion compared with R1.1 trillion in April.

Year-to-date volumes also remain in the same range as 2009 with the 2010 reported trade number at R5.85 trillion compared with R5.83 trillion in 2009.

"Given the stable interest rate outlook and the continued issuance by National Treasury and state-owned enterprises there is no reason to anticipate any major market volatility with regard to price or volume movements.
 
"June and July will present some volume pressure due to the soccer world cup; however volumes should return to normal after the event," commented Graham Smale, director: Interest Rate Products.

The market for listed interest rate derivatives continues to see positive growth.

Contracts traded during the three months ended May grew 44.9% year-on-year, off a low base.

 - I-Net Bridge