Equiniti Share Trading Barometer

Wed 15 Jun 2011

£52.7 billion less shares to be bought & sold in 2011

£52.7 billion less shares to be bought & sold in 2011

In 2011 an estimated £1.55 trillion worth of shares will change hands, down only marginally by 3.3% (£52.7 billion) when compared with the £1.61 trillion worth of shares that were bought and sold in 2010, according to analysis by UK’s largest share registrar, Equiniti Limited (“Equiniti”).

The study, Equiniti Share Trading Barometer, involved analysis of daily share trading activity over the first four months of this year, and correlated with the 252 trading days in 2010 across each of the exchanges that UK shares are bought and sold through (taking into account that 2011 will have only 251 trading days).

The market is estimated to record 25.7 million more trades during the course of the year than it did in 2010 - a rise of 11.4% and despite 2011 having one less trading day than 2010.

211.6 million trades can be expected across the various exchanges that trade UK listed companies this year, up when compared to the 185.9 million trades that occurred in 2010.

The exchanges include share trading platforms such as the London Stock Exchange, CHI-X and BATS.

Equiniti’s Chief Executive, Wayne Story, commented: "The average value of shares bought and sold every day in the UK in 2011 is estimated to be £6.19 billion - down from £6.38 billion in 2010 - that's £184.6 million less per day.

“Interestingly, our investigations show that a busy UK trading market is set to continue for 2011, with 25.7 million more trades predicted in 2011 compared to last year,  but a flatter market in terms of volume and value [per trade] this year.  Actual volumes [per trade] are down an average 273.6 million shares per day and values are down £184.6 million per day when compared to 2010.

“Despite the value of trades being down on previous years for both 2010 and 2011, the rising activity levels – in terms of increased number of trades being made – should be seen as a positive sign.”

In 2011 the average number of individual shares traded across all exchanges is estimated to reach 1.41 billion per day – in 2010 it was 1.69 billion. However these higher volume figures for 2010 were achieved through 25.7 million less actual transactions over the course of the year, pointing to smaller baskets of shares per each individual trade in 2011.

The solid levels of activity may also be due to the low yields typically being offered in cash and fixed interest products and against a backdrop of higher inflation.

The activity is also positive considering the FTSE 100 and FTSE All Shares indices were only able to offer flat performance by holding onto the gains of the fourth quarter of 2010, as at the end of the first quarter of 2011, with a creeping 1.1% and 1.0% rise respectively.

The news isn’t all rosy however; at the lower end of the market a number of scheduled share market listings and capital raisings have been pulled so far in 2011 highlighting some market volatility and uncertainty.