Business Square smaller and smaller: cala la market capitalisation Italian company compared to the gross domestic product. Stock investments down, while those in bonds grow. The number of companies listed on the electronic stock market - the main market of Piazza Affari - is reduced and at the same time the profitability of listed Italian companies improves while short selling increases.
It is the photograph of the Italian Stock Exchange taken by the latter Consob statistical bulletin relating to the first half of 2022 which overall outlines "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".
In the black year of the markets, the indicators describe an uncertain economic picture, which is affected by various "negative factors", such as the war in Ukraine, the soaring inflation, the energy price increases and the aggressive monetary policy of the Central Bank with the rate hike decided by the Eurotower.
The capitalization of the Italian Stock Exchange drops by 20,5%
The decline in share prices – reads the document – has depressed the capitalization number of listed Italian companies, which as at 30 June last drops by 20,5% on a half-yearly basis. 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.
Declining number of listed companies on the MTA (-2), while the number of companies listed on Euronext Growth Milan (EGM), the unregulated market dedicated to small and very small businesses (to be clear, the former AIM, Alternative Investment Market), is increasing.
Instead, the weight of the investments in bonds, especially those issued by financial companies. While the incidence of equity investments, in particular of Italian titles.
Borsa Italiana: the profits of industrial companies are growing
- profits of industrial enterprises listed on the main market (MTA) and on the EGM, as of 30 June last, they recorded a strong increase, 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).
Jump in short selling, declining portfolio of securities
Given the bearish expectations on prices due to the strong geopolitical tensions, the bulletin continues, there has been a strong growth in the phenomenon of short sales Net short positions (+38,2% on a six-monthly basis compared to 31 December 2021): at the end of June 2022, net short positions were “equal to 1% of total capitalization (0,6% at the end of 2021); for companies in the financial sector, this figure was equal to 1,1% of the sector capitalization (0,3% at the end of 2021)".
Finally, down the securities portfolio held with Italian intermediaries (-10,3%) and bank deposits of households and businesses (-2,5%). Inflows of 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.
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