Two of Europe’s largest alternative venues for trading shares have reported record first half volumes of shares traded, even as investors have struggled with flat markets.
Figures from Chi-X Europe, a pan-European share trading platform, and Liquidnet, a US operator of “dark pools”, suggest some of the region’s share trading venues have enjoyed a stronger first six months than incumbent exchanges such as NYSE Euronext, Deutsche Börse and the London Stock Exchange, which have all reported soft markets for equities trading in the first half.
Chi-X is a “lit” venue, where prices are available for all to see, while Liquidnet operates dark pools where large orders get sent for execution anonymously. Both types of platform were encouraged to compete against traditional exchanges by European financial markets regulation in 2007.
Chi-X reported a 1 per cent rise in the volume of shares traded to €860bn, a record first half performance, while the number of trades rose 18 per cent to 154.3m. It added that it had taken market share in France, the UK and Belgium, but lost out in Germany, Switzerland and the Nordic markets.
“I am delighted that Chi-X Europe has maintained its pattern of growth and continues to be the largest pan-European stock exchange, despite the period of uncertainty surrounding the proposed sale of the company,” said Alasdair Haynes, chief executive of Chi-X Europe. “What is particularly pleasing is that the second half of the year has got off to an excellent start,” he said.
Chi-X provided no further information on its potential acquisition by US rival BATS Global Markets, which has been referred to the UK Competition Commission. A decision is expected in early December.
Meanwhile, Liquidnet said the principal traded in Europe in the same period rose 12 per cent year-on-year to $41.6bn. Liquidnet’s platform matches trades in private, with prices only revealed after a trade is completed. It allows asset managers and pension funds to execute large block trades away from exchanges, helping avoid the risk of prices moving against the seller or the buyer. Average daily liquidity in the second quarter rose 19 per cent to $19.7bn year-on-year.
The group benefited from a deal in January with SIX Swiss Exchange in which it allowed members of the Swiss exchange and its own buyside customers to execute large block trades in Swiss and other European equities.
In the US, Liquidnet saw total trading volume rise 2 per cent year-on-year, while June volume rose 18 per cent to more than 1bn shares and average daily volume increased 18 per cent to more than 49m shares compared with the year-earlier period.
The figures stand in contrast to recent monthly trading figures from the main US and European exchanges, which highlighted the fragility of the cash equities trading market on both sides of the Atlantic, while derivatives trading continued to grow.
Figures from NYSE Euronext and Nasdaq OMX showed softness in European markets, while the LSE said the 29.1m trades on its electronic equity order books were for a combined value of £201.8bn, down 3 per cent on a year ago.
Separately, TriOptima, a post-trade services company owned by interdealer broker Icap, said it had eliminated interest rate swaps with a notional value of $22,100bn and credit default swaps with a notional value of $3,200bn.
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