Statistical Bulletin no. 18 - CONSOB AND ITS ACTIVITIES
Statistical Bulletin no. 18 - June 2021
Listed companies and financial intermediation in 2020
In 2020 the capitalization of Italian companies with shares admitted to trading on Italian regulated markets and multilateral trading systems (hereinafter referred to as "Italianlisted companies") decreased by 10.1%. This was due to the fall of market prices (the Ftse All Share Italia index recorded a decline of 6.7% in 2020); the ratio between capitalization and GDP changed from 33.1% at the end of 2019 to 32% at the end of 2020.The number of Italian listed companies increased from 381 to 382, due to the new listing on the AIM (+6) and the delisting on the MTA (-5).
Italian non-financial companies listed on the MTA and on the AIM recorded profits of approximately 10.7 billion euro and 102.2 million euro respectively, against a profit of approximately17.6 billion euros and 130.4 million euros in the previous year. Their cash flows in 2020 increased significantly (+ 580% for listed on MTA and + 880.6% for listed on the AIM). The resources obtained financed investments of 15.2 billion euros (12.5 in 2019)for companies listed on the MTA and 503.8 million euros (655.9 in 2019) for companies listed on the AIM. For non-financial MTA companies the ratio between flows deriving from financing and investment activities is 125.7% while of 84,6% for non-financial AIMcompanies. Companies of the MTA obtain greater cash flows from financing activities (equity +0.2 %, current liabilities + 24.3%, non-current liabilities + 8.1%) against companies of the AIM (equity -15.5%, current liabilities -12.1%, non-current liabilities-25.4%). On the other hand, companies of the AIM mostly generate their own flows from operations (+26.7%) against companies of the MTA (-19.1%). The increase in liabilities of Italian non-financial companies listed on the MTA and listed on the AIM was approximately42 billion and approximately 143 million euro respectively.
The insurance companies listed on the MTA recorded a reduction in net profit (3 billion euros compared to 4.1 billion the previous year). This is attributable to the lower profitabilityof the financial management of investments (which went from 4.2% in 2019 to 2.2%), partially offset by the improvement in the insurance management of technical provisions (which went from -2.6% in 2019 to -0.5%). Insurance reduced leverage as net worth grewmore (8.5%) than investments (4.1%) and technical reserves (3%). Net flows generated by operating and investing activities decreased (from 4.5 billion in 2019 to 1.9 in 2020) and were offset by a reduction in loans granted (from 3.6 to 0.8 billions). The ratiobetween financial assets available for sale and those valued at fair value has grown, signalling an accentuated investment preference for more liquid securities.
Banks listed on the MTA recorded a sharp reduction in their profitability (both in terms of profit 879 million euros in 2020 compared to 9.2 billion in 2019 and total profitabilityand 1,028 million euros in 2020 compared to 14.7 billion of euros in 2019). This lower profitability affected all operating activities: reduction of the interest margin of € 3.7 billion, reduction of net commissions by approximately € 1.5 billion, increase in adjustments due to credit risk for approximately € 3.4billion and worst fair value measurement of financial assets and liabilities for approximately 1.6 billion euro. The reduction in commission flows is not generated by reduction in the volumes of investment services that have undergone limited changes but toan important reduction in margins. In 2020, the shareholders' equity of listed banks increased slightly to € 176.8 billion (5.6% compared to 2019).
The trading volume of shares of Italian listed companies on regulated markets and multilateral trading facilities based in Italy and abroad increased by 5.6% compared to 2019. The fails volume of Italian listed shares traded on MTA was 4% of total turnover on MTA (4.4% at the end of 2019).
The notional turnover in equity derivatives decreased by 11.9%, involving all types of instruments except index covered warrant. At the end of 2020, the notional turnover of openpositions on equity derivatives was 35.3% lower than the corresponding figure at the end of 2019. The notional turnover of commodity derivatives recorded a decrement of 13% involving basically covered warrants on commodity. The open positions of Italian electricityfutures registered a decrease of 25% compared to the end of the previous year.
In 2020, the net short positions on Italian listed shares fell by 23%, despite the increase in trade. At the end of 2020, net short positions on Italian listed shares were equal to0.8% of the total capitalization (1% at the end of 2019); for companies in the financial sector, this figure was equal to 0.6% of the sector capitalization (1% at the end of 2019).
At the end of 2020, the margins established by the members of the central counterparty system related to Italian regulated markets were 9.8% lower than the value recorded at the endof 2019.
During 2020, the trading volume of Italian government securities on Italian trading platforms increased by 71.8%, mainly due to the increase in trades on MTS (+104.6%), but also forthe continuation of the purchase interventions connected to the monetary policy implemented on the Bondvision market. Istead there was a decrease in turnover of Italian bonds other than government securities (-13.9%) due to a decrease in exchanges on EuroTLXthat recorded a decrement of 29.5%. Moreover, there was a rise in the trading volume of ETFs and securitized derivative financial instruments (ETCs/ETNs) (+24.9%), attributable in particular to the growth exchange traded facilities (+16.8%).
With regard to the bonds of Italian non-state issuers, in 2020 trading decreased by 15%, this figure is attributable to the trading of bonds of financial issuers. Bond Issues by Italianbanks in 2020 recorded a reduction of 22.7% (compared to 2019). Offers on the domestic market reduced by -33.1%, private offers to institutional investors reduced by -9.3%.
At the end of 2020, the value of financial instruments held with Italian intermediaries for the provision of investment and asset management services had increased by 2.58% comparedto the figure at the end of 2019, a lower change than the increase in deposits in the same period, referring to Italy for households and non-financial businesses (+ 7.3%), this indicates a greater preference of investors for liquid assets. In the equity portfolio,the weight of foreign stocks increased to the detriment of Italian ones. Retail customers in the last quarter of 2020 significantly reduced their investment in Italian government bonds, keeping it in any case at levels slightly higher than those of the beginningof the year, unlike what was done by professional customers who in the last quarter of the year increased investment in Italian government bonds. At the end of the year, the investment of retail customers in UCITS units represents by far the most importantpart and grows up to 60.5%.
The volumes of activity relating to the provision of investment services increased overall in 2020, placement of financial instruments (+ 7.9%), trading on own account (+ 21.7%),receipt and transmission of orders (+26.4%) and order execution (+ 6.8%). Gross premiums deriving from the placement of insurance products with a prevalent financial content distributed in Italy by Italian intermediaries recorded a decrease (-7.2%), due tothe decrease in premiums relating to the distribution of unit linked policies (-5.8%).
At the end of 2020, the assets managed by Italian intermediaries had grown compared to the end of 2019 (+ 4.3%) mainly linked to portfolio management contracts (+ 4.8%) which representover 71.5% of the net assets. In particular, the assets of foreign open-end UCIs placed in Italy grew by 5.5%, while that of Italian open-end UCIs fell by 1.5%. For the first time after 2013, the number of UCIs under Italian law fell. The increase in assetsattributable to individual asset management established in Italy was 2.7%, that of closed-end Italian-law funds was 11.5% (also increased in terms of number and now comparable with that of open UCITS under Italian law) and that relating to pension funds andother pension forms set up in Italy by companies other than insurance companies was 9.6%.
In 2020, net inflows from Italian open-end UCITS was positive for € 6.9 billion, mainly for bond-type funds (+€ 4.8 billion), while the growth in equity and balanced fund collectionhas compensated for the repayments of flexible funds.
The Italian asset management companies accounting data at the end of 2020 show a decrease in the overall net profit generated compared to 2019 (-2.5%), mainly due to the decreasein net commissions (-2%) but also to the reduction in value of financial assets valued at fair value which went from 22.5 to -2.4 million euros. Reduction of operating costs (-3.4%) offset the reduction of commission. On the other hand, the decline in thenet profit of investment companies was more pronounced, which decreased by 9.3% due to the increase in administrative costs (+30.2%) not sufficiently offset by the increase in the intermediation margin (+13.9%).
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