Surging derivatives trade on the Australian Securities Exchange last month helped offset the continued decline in equities trading as the market operator searches for new growth business.
Investors are continuing to treat shares with caution despite the sharemarket outperforming major markets including the US,Britain,Hong Kong,Japan and Germany with a 3.2 per cent rise in the value of ASX-listed stocks in December.
Derivatives became the biggest business on the ASX in 2010 and continues to grow as equity market trading looks headed for a fourth straight year of decline.
The value of shares traded fell 17 per cent in December and are down 25 per cent in the financial year to date.
The ASX said daily derivatives traded on the exchange increased by 21 per cent in December,with both single stock options and index options volumes higher.
For the 2012 calendar year,average daily derivatives traded were 28 per cent higher at 623,549 a day,although for the six months to December 31 covering the first half of the ASX's financial year volumes were 7 per cent lower.
The market for options on futures was the standout,with volumes up 108 per cent last month and 54 per cent higher for the six months.
The ASX 24 market experienced a record day on December 14,when 1.6 million futures and options contracts were traded,up from the previous 1.5 million contract record.Latest figures from the ASX highlight the caution of retail investors despite a surge in the sharemarket in the last five months of the year.
Brokers said investors remained cautious about developments in the US and Europe where governments were struggling under the bill for their actions during the global financial crisis and concerns that their investment portfolios had been too heavily oriented to shares.
The average daily trade value fell 12 per cent to$3.4 billion in December and by 25 per cent to$3.76bn for the first six months of the new financial year,indicating a worsening trend.
The ASX has lost about 5 per cent market share to rival Chi-X,which opened for business in October 2011,and may also face competition from the same operator for derivatives trade,according to recent disclosures to the Australian Securities&Investments Commission.According to new data released by the exchange,it claimed 94.7 per cent of the value of shares traded on both the ASX and Chi-X.
Chi-X's figures were boosted by brokers reporting trades on their own internal networks or"dark pools"through the rival exchange rather than the ASX.
Chi-X accounted for 29.8 per cent of the average daily value of$338 million of"dark"trading reported in the week to January 4.
ASX is also facing a challenge to its monopoly on post-trade services,with Paris-based LCH Clearnet signalling its interest in offering equity trade clearing services in Australia.
It has also signed letters of intent with four of the five biggest banks in the country to provide central clearing for the$14.6 trillion over-the-counter derivatives market in Australia.
ASX shares have climbed 11 per cent since mid-November,in line with a rally in the sharemarket,and added 31c at$32.29 yesterday.
Listed companies raised just$349m of fresh capital in December,less than a 10th of the figure for a year ago,and just$3.69bn for the half-year,down from$6.73bn.
Secondary capital market raisings were also weaker at$3.8bn,down from$5.3bn.
New listings for December were 360 Capital Industrial Fund,Crescent Resources Corporation,Enterprise Uranium,Fortunis Resources,Krakatoa Resources,Mandalong Resources,MYOB Finance Australia,Paringa Resources and Tungsten Mining NL.
Those delisted included Aircruising Australia,CathRx,CCK Financial Solutions and CIF Investment Trust 1 and CIF Investment Trust 2