As the Middle East conflict escalates, global stock markets have entered a wave of mass sell-offs. According to data from the London Stock Exchange Group (LSEG), total global equity trading amounted to approximately $20 billion over the three trading days from last Friday to Tuesday, accounting for nearly 16% of this year's total trading volume so far. The speed of this trading activity is almost three times the average daily trading volume of the previous two months.
Market Sentiment Affected by Conflict
Due to the escalation in the Middle East situation, companies and investors, including those in the Gulf region, have recently initiated large-scale stock sales, raising tens of billions of dollars. Some companies choose to raise funds before the market potentially deteriorates further, to address possible future financing difficulties.
For example, the shareholders of US-listed medical company Medline, including Abu Dhabi Investment Authority (ADIA), Blackstone Group, and Carlyle Group, are seeking to sell shares in the market, with an expected transaction amount of approximately $3.4 billion.
Acceleration of Trading Activity and Financing
According to Tom Johnson, global head of capital markets at Barclays Bank, "If you face a choice and have a clear expectation of the outcome, it may be right to seize the current opportunity amid increased market volatility." He pointed out that despite the escalation of the Middle East conflict, some companies are still proceeding with their financing projects as planned. For instance, Rosebank Industries' $2.5 billion financing has not accelerated due to the changes in the Middle East situation, proceeding on its original schedule.
French energy company Engie raised 3 billion euros (approx. $3.49 billion) on Friday to support its acquisition of a UK power network company. Alexis Le Touze, head of equity capital markets at BNP Paribas, said the decision to launch a transaction during market instability is partly to preempt potential disruptions and investor attention.
Market Outlook and Sluggish Trading
Despite increased market volatility, many companies remain actively raising funds. Tom Swerling, global head of equity capital markets at Deutsche Bank, stated that if market volatility persists for weeks, trading activity may slow down, but many clients still need to complete transactions.
Amid heightened uncertainty due to the Middle East situation, global stock market volatility will continue to impact companies' financing strategies. As more companies and investors seek funds before market turmoil, the pace of stock market trading may further accelerate. How companies respond to market instability will become a crucial topic in the coming months.
