The Nordic Growth Market (NGM) has recorded the highest turnover in the history of the exchange. In total, the three markets of Sweden, Finland and Norway generated a turnover of close to €1bn in March. The previous record was set in October 2014 when turnover reached €797m.
The specialist structured products exchange recorded increased trading from institutional clients in ETPs which has contributed to the record trading, said Tommy Fransson (pictured), chief executive of NGM.
“We have seen recently an increasing number of semi-professional and institutional clients showing a lot of interest in trading bull/bear certificates,” said Fransson, who added that these products offer high liquidity and are attracting a new type of investor. “We have seen some transactions that suggest that HNWIs (high-net-worth investors) and family offices are being attracted to the market to hedge positions or invest large quantities in a particular strategy.”
The traditional retail market, said Fransson, has now evolved, with an increasing number of professional and semi-institutional investors investing in structured products via NGM. “That has had a positive impact on the turnover,” he said. “This for us is a good sign as it shows how important listed products are for investors.”
Societe Generale continues to dominate the activity on NGM with a 35% market share, although the recent arrival of Vontobel – which has catapulted itself into second position in the ranking with 14% market share – has helped give ETPs solid traction in new segments, according to Fransson.
Vontobel entered the Swedish listed structured products market with a range of bull & bear structured certificates geared towards both private and institutional clients in January this year.
Bull & bear certificates account for over 70% of the Swedish market, said Heiko Geiger, head of public distribution, Germany & Austria, at Vontobel Europe, who heads the bank’s listed products in Sweden.
“The combination of strong demand for structured products - especially bull & bear certificates - among private investors and institutional clients and our many years of expertise in this product category created ideal conditions for Vontobel’s entry into the Swedish market for structured products,” he said. “With an initial offering of more than 300 bull & bear certificates on indices, precious metals and leading European, US and Swiss equities, investors [can] execute their trading strategies in accordance with their individual risk profile in rising or falling markets.”
Vontobel, said Geiger, has now extended its product suite in bull & bear certificates to more than 400 products, and has launched a range of mini futures and knockout warrants on oil, gold, silver and the major indices.
According to Fransson, as more providers issue products the more competitive the market becomes for the end investor who can now access many different types of strategies (payoff types), asset classes (underlyings) and product types (certificates, warrants, etc) to address different market views and environments.
“ETP trading investors in Sweden have doubled during the last year according to figures disclosed recently by e-brokers which dominate the retail flows and they suggest that there is still room for growth as the number of participants in the ETP market is still small in proportion to the equity market,” he said. “The market climate is [also] fuelling activity and if volatility picks up this could have an even deeper impact in the market,” he said.
NGM, said Fransson, remains an active advocate for listed structured products and has developed a number of activities to promote this segment of the market including seminars and a trading competition in which end investors can trade products virtually without risking any money.
“We also have a daily TV show which provides technical analysis of products which is being followed by over 1,500 viewers,” he said.
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