Stock market capitalization in sharp decline compared to gross domestic product. The capitalization to GDP ratio went from 33% at the end of 2021 to 25.4% as at 30 June 2022. The number of Italian listed companies increased from 407 to 409, as a result of the admissions to listing on the AIM (+5), today Euronext Growth Milan and the revocations on MTA (-2) and on Hi-MTF (-1)
Stock investments down, while those in bonds are up. The number of companies listed on the electronic stock market (MTA), the main market in Piazza Affari, is reduced. At the same time, the profitability of listed Italian companies is clearly improving. Short selling on the rise.
The picture of the Italian Stock Exchange, taken in the latest Consob Statistical Bulletin for the first half of 2022, is a contrasted picture, with lights and shadows.
The data from the Bulletin, published today on the Consob website, outline a downturn in the securities market, downgraded to the values of the end of 2020, thus nullifying the gains recorded in 2021 due to the robust recovery following the covid lockdowns.
The indicators describe an uncertain economic picture, which is affected by various negative factors, such as the war in Ukraine, the surge in inflation driven, among others, by increases in energy prices and the expectations of a credit crunch by the Bank Central European Union, then confirmed by the rate hike decided by the Eurotower.
The decline in share prices depressed the overall capitalization of listed Italian companies, which fell by 20.5% on a half-yearly basis as at 30 June. In relation to the gross domestic product, the market capitalization therefore decreased from 33% at the end of 2021 to 25.4% at the end of June 2022.
The number of companies listed on the MTA is down (-2), while the number of companies listed on Euronext Growth Milan (Egm), the unregulated market dedicated to small and very small businesses (the former Aim, Alternative Investment Market), is increasing.
The weight of investments in bonds is growing, especially those issued by financial companies. On the other hand, the incidence of investments in shares decreased, in particular of Italian securities.
The profits of industrial companies listed on the main market (MTA) and on the EGM recorded a strong increase as of 30 June, rising respectively to 21.2 billion euros (from 8.7 billion) and to 195 million (from 134 million ). There was also an improvement in the profits of banks (7.5 billion euro from the previous 7.2 billion), of insurance companies (to 3.2 billion from 3.1 billion), while a slight decrease was recorded for other financial companies (a 0.7 billion from 0.8 billion).
Given the bearish expectations on prices due to the strong geopolitical tensions, there was a strong growth in the phenomenon of short selling (+38.2% on a half-yearly basis the net short positions compared to 31 December 2021).
The portfolio of securities held with Italian intermediaries decreased (-10.3%) and the bank deposits of households and businesses (-2.5%). Inflows from financial instruments (-17.6% to 202.5 billion) and insurance products with a mainly financial content (-30.8% to 19.7 billion) by Italian intermediaries also decreased in the first half.