Listed companies and financial intermediation in 2020
In the first half of 2020 the capitalization of companies with shares admitted to trading on Italian regulated markets and multilateral trading facilities (hereinafter referred to as "Italian listed companies") decreased by 16,4% due to the fall in market prices (the Ftse All Share Italy Index decreased by 18,6% in the first half of 2020) and the ratio between capitalization and GDP rose from 33.1% at the end of 2019 to 33.5% at the end of June. The number of Italian listed companies decreased from 360 to 355 due to the delistings on AIM (-4) and to the delistings on MTA (-1).
In the period under review, the non-financial companies listed on the MTA, and those listed on the AIM, recorded a balance sheet loss of approximately € 5.6 billion and € 9.6 million respectively, against a profit of approximately € 10.7 billion and 72.5 million euros in the first half of the previous year. Consequently, limited operating cash flows were recorded (reduced by 64.2% and 48% respectively) and an increase in the use of loans (for 6.1 billion euro for MTA listed companies and 323.8 million euro for listed on AIM, with an increase of 13.5% and 18.9%). For those listed on the MTA, only third party loans increased as equity (invested equity) fell (-6.5%). For companies listed on AIM, on the other hand, loans made through own means also increased (+ 26.3%). The resources obtained financed new investments for 8.4 billion euros (+ 13.5%) for companies listed on the MTA and 251.8 million euros (-21%) for companies listed on the AIM.
Insurance listed on the MTA budgeted a reduction in net profit (1.7 billion euros compared to 2.3 billion in the first half of the previous year) and a reduction in shareholders' equity of 2.6 billion euros ( -7.5%).
Banks listed on the MTA recorded a profit of € 0.7 billion (down from € 7.1 billion in the same period of 2019) and a total negative profitability of € -9 million compared to a profitability of € 7.7 billion of the first half of 2019). This lower profitability is mainly due to the increase in adjustments due to credit risk (approximately € 2 billion), the fair value measurement of financial assets and liabilities (approximately € 1.8 billion) and higher personnel expenses (approximately 1.2 billion euros). Commission flows, mainly attributable to investment services, have undergone limited changes. In the first half of 2020, the shareholders' equity of listed banks increased by € 6.9 billion (+ 4% compared to the first half of 2019).
During the half-year, the trading volume of shares of Italian listed companies on regulated markets and multilateral trading facilities based in Italy and abroad increased by 23.5% compared to the same period of 2019. The fails volume of Italian listed shares traded on MTA was 4.6% of total turnover on MTA (4.4% in the first half of 2019).
The notional turnover in equity derivatives increased by 8.8%, involving the financial instruments having indexes as underlying asset. At the end of June, the notional turnover of open positions on equity derivatives was 20.5% lower than the corresponding figure at the end of 2019. The notional turnover of commodity derivatives recorded an increment of 307.8% involving basically covered warrants on commodity. At the end of June, the open positions of Italian electricity futures registered an increase of 5.8% compared to the end of the previous year.
At the end of June 2020, the net short positions on Italian listed shares were equal to 0.8% of total capitalization (1% at the end of 2019); for the financial sector this figure was equal to 0.9% of total sector capitalization (1% at the end of 2019).
During the half-year, the trading volume of Italian government securities on Italian trading platforms increased by 39.1%, mainly due to the rise in trades on MTS (+41.1%). In addition, there was an increase in turnover of Italian bonds other than government securities (+15.3%) due to a generalized increase in exchanges on Italian trading platforms except for EuroTLX that recorded a decrement of 12.2%. Moreover, there was a rise in the trading volume of ETFs and securitized derivative financial instruments (ETCs/ETNs) (+39.4%), attributable in particular to the growth exchange traded facilities (+27.6%).
At the end of June 2020, the margins established by the members of the central counterparty system related to Italian regulated markets were 18.9% upper than the value recorded at the end of 2019.
In the first half of 2020 there was a 14.2% reduction in bond issues by Italian banks (compared to the same period in 2019), due to public offers on the domestic market (-36.1%). Private offers to institutional investors, on the other hand, grew (by 29.5%).
At the end of June 2020, the value of the financial instruments held by Italian intermediaries for the provision of investment services and collective management of assets decreased by 2.3% compared to the corresponding figure recorded at the end of 2019. Conversely, the monetary aggregates of the euro area (M2) referring to Italy in the same period increased by 3.9%, this could indicate a greater investor preference for liquid assets and an overall stability of the sum of the two quantities.
Similarly, the volume of activities related to the provision of investment services increased overall in the first half of 2020 (placement of financial instruments +17.9%, dealing for own account +45.7%, orders received and forwarded +29.3%, order execution (+31.3%)). Gross premiums deriving from the placement of insurance products with prevailing financial content distributed in Italy by Italian intermediaries recorded a drop (-33,4%), due to the reduction in premiums related to the distribution of unit-linked policies (-34%).
Due to the reduction in market prices at the end of June 2020, the assets managed by Italian intermediaries were down compared to the end of 2019 (-1.4%), the decrease in assets attributable to individual asset management established in Italy was of -0.4%, that of open-end funds under Italian law of -4.9%, that of closed-end funds under Italian law of -2.7%. The decrease in assets attributable to pension funds and other pension funds established in Italy from companies other than insurance companies was -2.2%. The net asset value of foreign open-end UCIs placed in Italy also decreased (-1.1%).
At the end of June 2020, the assets managed by Italian intermediaries showed a reduction compared to the end of 2019 (-1.4%), due to the decrease in assets attributable to assets managements on individual basis established in Italy (-0.4%), to Italian open ended funds (-4.9%), to Italian closed ended collective investment schemes (-2.7%) and to the decrease of assets referred to non-insurance pension schemes established in Italy (-2.2%). In addition, the assets of foreign open UCIs held in Italy decreased slightly (-1.1%).
The first-half 2020 net inflows for Italian open-end UCIs were positive for 6.3 billion euro, mainly attributable to bond-type funds (+ € 3.1 billion).
The financial statements of Italian asset management companies showed a decrease in net profit compared to 2019 (-13.4%), due mainly to the decrease in dividends and similar income (-44.7%) for the period. In addition, the net profit of the Italian investment companies decreased by 42.2%, mainly due to the increase in commission expenses and to the reduction in dividends and similar income.
The Report was prepared by:
Gaetano N. Finiguerra (supervisor) - CONSOB, Head of Statistics Office, Research Department (firstname.lastname@example.org)
Renato Grasso (coordinator) - CONSOB, Statistics Office, Research Department (email@example.com)
Emilio Ciccone - CONSOB, Statistics Office, Research Department (firstname.lastname@example.org)
Simona Di Rocco - CONSOB, Statistics Office, Research Department (email@example.com)
Francesco Scalese - CONSOB, Statistics Office, Research Department (firstname.lastname@example.org)
Fabrizio Figoni - CONSOB, Statistics Office, Research Department (email@example.com)
Thanks to Lucia Pierantoni for her collaboration (firstname.lastname@example.org)
Editorial secretary: Andrea Cianciullo
For information and clarifications write to: Ufficio.Statistiche@consob.it