Spain Exchange Volumes Jump

Terry Flanagan

Equity trading volume on the Spanish stock exchange in October was the highest for 27 months as the market draws increasing international institutional interest according to analysts.

BME said in a statement today that equity trading volume last month was €91.4bn, 30% more than  in October 2012 and the highest for 27 months. However in the first ten months of this year, total volume was down 3.9% from the same period in 2012 at €575.8bn. By the number of equity trades, October was a monthly record for the BME at 6.36 million, 133% more than the same month last year. In the first ten months of this year, the total number of equity trades was 39.5 million, 9% up year-on-year.

The volume of exchange-traded funds on the Spanish exchange also increased 40.2% year-on-year to €3.3bn in the first ten months of this year.

In a report Thomas Mills, an analyst at KBW, said he was positive on BME’s equity revenues due to increased international institutional interest in the Spanish market. Despite raising his estimates the analyst warned that risks still remained from a potential EU transaction tax, increased competition and reform of the European settlement market.

Mills is comparatively bearish on the near-term outlook for Deutsche Boerse, citing lower volumes. Mills said in a report: “2013 looks set to be the weakest for exchange traded volumes since 2006.”

The analyst said that in the first nine months of this year equity volumes at Deutsche Boerse fell 13% year-on-year, index derivative volumes fell 20% in the same period while fixed income derivative volumes rose 1%.

Gregor Pottmeyer, Deutsche Boerse’s chief financial officer and executive board member for human resources, said in the German exchange’s results statement that in the third quarter net revenue was hit by the low cash market volatility and extremely low interest rates. Pottmeyer said: “Nevertheless, on the basis of the first three quarters we are confirming our net revenue forecast for full-year 2013.”

Mills said: “Despite our near-term caution, we continue to view Deutsche Boerse as attractively positioned to benefit from a rising rate environment and as a winner from incoming market reforms, which should place greater emphasis on collateral management. However, we don’t see this helping much in 2014E/15E.”

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