To determine just how badly the global economic uncertainty is plaguing Canadian markets, you need only look at one statistic.
During the second quarter, the average daily trading volume for stocks worth more than $1 fell by a whopping 15 per cent, according to a new report by ITG Canada. Much of this drop came in April, when volumes plummeted from abut 560 million shares per day, down to just shy of 400 million, before gaining some of the losses back.
Now couple that statistic with the current state of block trading, which plain vanilla equity traders used to rely on, and you get a clear picture of just how grim it is for the old-fashioned bunch. From April to June, block trades as a percentage of total market activity ticked slightly lower, putting them at only 16 per cent of total volume.
However, at least the market is getting a bit easier to read. Message traffic was down for the third straight quarter, falling 14 per cent from April to June. Because of this, the order-to-trade ratio fell 7.5 per cent.
In part, fewer messages is a result of the Investment Industry Organization of Canada’s market regulation fee, which was instituted on April 1 and tries to recover costs from the most active traders.