Turquoise trading hits all-time high

An equity trading venue run by the London Stock Exchange Group recorded its highest-ever trading day on March 10. The record reflects its continued increase in market share as well as the impact of new EU stimulus measures on markets in general.

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Turquoise, a pan-European equity platform majority-owned by the LSE, traded European equities worth €9.86 billion on March 10, according to its own data. It beat the platform’s previous daily record of €8.5 billion recorded on February 2.

The volume spike was largely due to positive stimulus measures announced by the European Central Bank president Mario Draghi, according to Robert Barnes, Turquoise’s CEO.

Across the European market as a whole, the total value of trading was €73.5 billion, compared with €46.6 billion on March 9, according to Bats Europe data.

Bats, which is the region’s largest stock exchange by value traded, said that one of its most actively traded names on March 10 was the iShares EURO STOXX 50 ETF, as investors sought a broad exposure to the EU’s economy. It is unusual for an ETF to be among the most-traded names on an EU exchange. They are typically thinly traded names, given the fragmented nature of the region’s ETF market.

Even though Turquoise enjoyed a record day, volumes in the EU market overall fell far short of those traded on August 24, 2015. On that day the value traded reached €114.3 billion as concerns over the weak performance of the Chinese economy and a delayed decision on raising interest rates in the US caused market turmoil.

Turquoise’s record volumes were a reflection of its continued growth in market share, according to Barnes. He said: “We have been trying hard to raise our visibility and widen our membership, particularly in continental Europe.”

The platform has had a tumultuous history. It was launched in 2008 by a consortium of banks in a bid to compete with incumbent exchanges such as the LSE, but initially struggled to gain meaningful market share. It was then acquired by the LSE in 2009 and was one of Xavier Rolet’s first major acquisitions as the bourse’s chief executive. Twelve investment banks retain a minority stake in the platform, a holding originally designed to restore the UK exchange’s relationships with its major customers.

Since then, the platform has steadily grown its market share, and on March 10 Turquoise accounted for around 13% of European equity trading by value traded, according to Bats Europe data. Its market share was around 8.5% in March 2015.

Its volumes have also been boosted from new initiatives including its block order service, according to Barnes, which is attempting to tap into buyside demand for larger trades.

The record volumes come amid ongoing uncertainty over the future ownership of Turquoise’s parent company. In February 2016, the LSE and Deutsche Börse announced they were in advanced talks over a merger of equals and the pair are expected to announce detailed plans for the proposed merger next week, according to people familiar with the situation.

However Atlanta-based Intercontinental Exchange announced on March 1 that it was mulling a counterbid for the LSE.

Even though ICE owns the New York Stock Exchange following its 2011 acquisition of NYSE Euronext, it remains primarily a derivatives market operator.

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