The Luck of the Irish – 27 January 2010
First Published Thursday, 28th January 2010 03:06 pm from Fidessa : Fidessa
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Looks like it's Ireland's turn to run the
gauntlet with the MTF community. Pretty much all the MTFs - title="Chi-X"
href="http://fragmentation.fidessa.com/stats/exchange/CIX.html"
href="http://fragmentation.fidessa.com/stats/exchange/BTE.html"
href="http://fragmentation.fidessa.com/stats/exchange/NEU.html"
target="_blank">NASDAQ OMX Europe and title="Turquoise"
href="http://fragmentation.fidessa.com/stats/exchange/TRQ.html"
target="_blank">Turquoise - have announced that they
will be trading Irish stocks from now on. For this reason we have
href="http://fragmentation.fidessa.com/stats/exchange/ISE.html"
target="_blank">Irish Stock Exchange (ISE) and its
href="http://fragmentation.fidessa.com/stats/index/IEOP-I.html"
target="_blank">ISEQ) on the FFI website. A quick
look revealed that many Irish stocks are in fact traded on the
LSE and so Dublin's market share of its main index is less than
30 percent already.
This is a good pointer to
the decoupling that is occurring between indices and their parent
exchanges. In Dublin's case it's got nothing to do with
MiFID but the simple fact that the LSE is the bigger marketplace
for some of the large cap Irish stocks (which make up the ISEQ
index). For other indices, such as the
href="http://fragmentation.fidessa.com/stats/index/UKX.html"
href="http://fragmentation.fidessa.com/stats/index/CAC40.html"
target="_blank">CAC 40 and the
href="http://fragmentation.fidessa.com/stats/index/DAX.html"
target="_blank">DAX, we are slowly but surely seeing
them decouple from their parent exchanges and start to exist in
their own right. The more this continues to happen, the happier
the MTFs will be as this helps to break apart the concept that
any given stock or index should "belong" to a specific exchange
in terms of trading.
As this process
continues, country-specific indices may become less relevant as
we are all increasingly forced to adopt a more pan-European
target="_blank">S&P Europe 350, the title="FTSE Developed Europe Ex UK Index"
href="http://www.ftse.com/Indices/FTSE_All_World_Index_Series/Downloads/FTSE_Developed__Europe__ex_UK_Index_Factsheet.pdf"
target="_blank">FTSE Developed Europe Ex UK Index or
sector-specific indices like the
href="http://www.stoxx.com/indices/index_information.html?symbol=SXKE"
target="_blank">Dow Jones EURO STOXX®
Telecommunications index may well become more relevant
than the current crop of country-specific indicators.
I guess when this has happened you could say that MiFID
will have done its job in terms of breaking down the national
monopolies in equities trading across Europe.
Is it all over for Dublin as far as keeping hold of its
current market share of ISEQ stocks? So far it's too early to
tell and, of course, there is nothing to stop the ISE reinventing
itself as a pan-European venue and taking on the MTFs at their
own game.
