FGvsLX100

Both the Liv-ex 100 Index and the First Growths’ share of trade have declined since mid-2011, and the chart above shows clear correlations between their movements. As we have suggested previously, the share of the First Growths’ trade on Liv-ex appears to act as a proxy for market sentiment. When buyers and sellers are feeling optimistic, First Growths see an increased level of trade.

In the past year, both the First Growths’ share of trade and the Liv-ex 100 have seen some fluctuations. However, both look steady when viewed over one year: The Liv-ex 100 has dropped just 0.8% – a small decline compared to the 28.1% drop over five years – while the First Growths’ trade share has held at just above 30% overall, running flat across the year. With no significant movements, is it time for the tide to change direction?