Societe Generale (SG) has started trading on the warrants, certificates and other products segment of Bolsas y Mercados Españoles (BME) with its Multi range, a new suite of exchange-traded products (ETPs) offering bullish and bearish exposure to the Ibex 35 x10 Leverage Net and Ibex 35 x10 Short, two daily leverage and daily leverage short indices recently launched by the Spanish stock exchange.
The first SG Multi products were admitted to trading on the Spanish market in February last year. They offer exposure to the performance of the Ibex 35 Triple Leverage Net, Ibex 35 Triple Short, Ibex 35 x5 Leverage Net and Ibex 35 x5 Short.
The trading volume in the warrants and certificates in the Spanish market in the first quarter of this year was up 61% year on year, said Carlos García Rincón from distribution, listed products at SG Corporate & Investment Banking (CIB) in Madrid.
“With this new issue, Societe Generale widens its scope of products listed on the Spanish stock exchange that are linked to a broad range of shares, indices, currencies and commodities,” he said. “This represents a key development in our coverage of the Spanish market.”
The volume of the SG Multi range, said García, represents more than 15% of the total volume of listed products in the first quarter of this year.
“The trading volume on the warrants and certificates market in the first three months of 2015 reached €335.2m, up 61% year on year,” said García. “The trading volume in March in this market reached €115.2m, up 53% from March 2014.”
SG's new launch follows a surge in trading activity around listed products in Spain.
After a few difficult years, said Alexandre Houpert (pictured), head of listed products Europe at SG, the Spanish listed market is picking up and the figures from the exchange show that since the beginning of the autumn it has gained momentum.
“Spain’s listed market, which reported a trading volume in 2014 of €800m, is lagging behind other European markets such as France (€5bn) or Italy (€18bn) but we see good potential,” said Houpert. “In the past, the certificates and warrants market in Spain was very active and we want to be part of any recovery. We are in constant dialogue with stockbrokers and investors to be able to react quickly to any trend in the market. We believe this new range will meet the demand of investors in Spain and we will continue developing the range by introducing new leverage factors. The trading volumes provided by the exchange are very encouraging.”
The trading volume of the warrants and certificates market to the end of February in Spain reached €220.1m, up 65% on the same period in 2014. In February the trading volume was €110.7m, up 91% on the same month in 2014.
The move follows a number of similar developments in the UK and Italy where the French bank has recently bolstered its listed products range, including with new leverage/short and credit-linked notes in the London Stock Exchange (LSE), and a suite of collateralised exchange-traded commodities (ETCs) on the Italian stock exchange launched in November 2014 which included products tracking gold and oil in long, short and long euro hedged daily versions as well as structures with leverage factors of +3x and -3x daily.
Daily leverage certificates, said Houpert, have become a core product within SG’s structured products offering across Europe and the company now has leverage and short products in every European market it covers.
“The leverage/short range was originally created by SG and launched in France in 2011, and has grown to become a key offering in other markets such as the Nordics, Italy or the UK,” said Houpert. “The range has been built around each of the domestic benchmarks (CAC-40, AEX, MIB/FTSE, Ibex 35) and the leverage factor can go up to x15 depending on the market.”
The launch in Spain, said Houpert, reflects the bank’s commitment to meet demand. “We will continue developing the range by introducing new leverage factors,” he said.
BME reported a trading volume of €85.6bn in the equities market, up 32% year on year, with an accumulated trading volume of €260.3bn, in Q1 2015, up 37% year on year.
The Spanish exchange also reported €1.2bn trading volume in the ETF segment in March, up 71% from the same month a year earlier, and €3.1bn for Q1 2015, up 17% from a year earlier. In the meantime, the trading volume in the futures and options segment in March reached 6.1m contracts, up 10.5% year on year.
BME also reported heavy trading in derivatives on indices, with 590,333 Ibex 35 futures contracts traded, up 5.8% year on year, and 715,843 contracts traded on Ibex 35 options, up 46.4% on the year. In addition, the exchange reported that trading in options on stocks in March picked up from the previous month, with 2m contracts traded, up 41.2%.
The Spanish branch of Societe Generale will act as the liquidity provider. SG has marketed 230 structured products in the Spanish market, of which 212 are leverage certificates. The French bank has also acted as derivatives counterparty for 13 products sold by Barclays (9), Inversis Banco (3) and Deutsche Bank (1) of which six marketed by Barclays are still live.
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