Euronext plagued by weak FX, derivatives trading volumes

abdelaziz Fathi

Pan-European exchange, Euronext has reported a 15 percent drop in the average daily volume on its spot foreign exchange market. The ADV figure stood at $18 billion in December 2022, which is down from November’s $21 billion.

Taking a year-over-year perspective, Euronext’s currency turnover was slightly higher from $17.7 billion reported back in December 2021.

In terms of its aggregated monthly turnover, Euronext FX reported $394 billion, which is down from $463 billion that changed hands in the previous month.

Euronext, which operates stock and derivatives markets in countries such as France, the Netherlands and Belgium, also said its total derivatives trading was higher by 26 percent. The figure was reported at 10.9 million contracts a day in December compared to 14.7 million in the month prior. It was down -22 percent when weighed against 2021’s turnover of 14.0 million contacts.

Euronext confirmed the attractiveness of its primary markets activity in 2022, remaining the leading venue for equity listing in Europe and debt listing worldwide. The company operates listing venues in Amsterdam, Brussels, Dublin, Lisbon, Oslo, Milan and Paris, and is home to 1,900+ equity issuers, worth €6.4 trillion in aggregated market capitalisation. As of today, Euronext is by far the largest stock market operator in Europe in terms of aggregated market capitalisation. Additionally, 25% of the shares traded in Europe are traded on Euronext markets.

Trading revenue in Q3 2022 was, however, lower by 6 percent on a yearly basis to €118 million, primarily driven by lower cash equity and MTS Cash volumes. The drop was partially offset by yield management and strong quarters for FX, derivatives and power trading.

Meanwhile, post-trade revenue grew 3.7 percent to €86.2 million thanks to the strong performance of the clearing activities of its Italian units. In addition, custody and settlement revenue scored a mild increase to €57.1 million even though the Nordic CSDs was less dynamic reflecting notably normalised levels of retail activity.

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