Turnover in exchange-traded investment and leverage products on Europe's financial markets stood at €29bn at the end of the fourth quarter of 2017, an increase of 16% quarter-on-quarter and 3% on the fourth quarter of the previous year, according to the European Structured Investment Products Association (Eusipa).
Fourth-quarter turnover in investment products trading on European exchanges amounted to €14.2bn - 48.9% of the total. Exchange-based turnover surged 39% on the previous quarter, and rose 31% from the same period of 2016.
The substantial growth registered in investment certificates turnover was mainly due to the development of the Swedish market, according to the trade body. The Six Exchange reported earlier this year that 2017 'had been a positive year for Six with over CHF160bn (€137bn) traded on the exchange. Six also reported that exchange-traded funds (ETFs) continued to drive the shift from active to passive management, and a spike in trading activity on the back of bitcoin tracker certificates issued by Leonteq and Vontobel including short and long versions 'which attracted very significant volumes', with the "only disappointment" coming from structured products as the low levels of volatility throughout the year affected the appetite to use leverage products for hedging or speculative investing, according to André Buck, head of sales at Six.
Boerse Stuttgart also reported that the most traded products in 2017 were two participation certificates for the cryptocurrency bitcoin with over 27,000 customer orders executed with a total volume of more than €216m, during the fourth quarter of 2017. The bitcoin products are offered by Vontobel which launched a continuously available version of the Bitcoin Participation Certficate in November 2016, which was followed by an Open-End Participation Certificate on Bitcoin, which is also available for trading on the Frankfurt and Stuttgart stock exchanges, as well as over-the-counter.
From October to December, turnover in leverage products in Europe including warrants, knockout warrants, factor certificates amounted to €14.8bn, 51.1% of aggregate turnover. Turnover was almost unchanged from the previous quarter and down 14% year on year.
At the end of December, exchanges located in Eusipa member countries had listed 522,558 investment products and 1,182,213 leverage products. The listed products offering saw a slight increase of 1% quarter on quarter and a significant 18% increase year on year.
Banks issued 980,106 new investment and leverage products in the fourth quarter of the year. This represented a 4% increase in new issuance compared with the previous quarter. On a year-on-year basis, issuance grew 9%. In total, 141,775 new investment products were launched, accounting for 14.5% of all new issues, and 838,331 new leverage products were listed, accounting for 85.5% of new issues.
At the end of the fourth quarter, in Austria, Belgium, Germany and Switzerland, the market volume of investment and leverage products recognised as securities totalled €260.5bn - up 2% on the previous quarter. Volume increased 1% year on year.
At the end of December, the market volume of investment products amounted to €225.7bn, an increase of 2% on the previous quarter and 2% year on year. The outstanding volume of leverage products totalled €34.8bn at the end of December, up 1% on the third quarter. In comparison with the figure recorded for the same period of 2016, outstanding volume dropped 6.0%.
The overall issuance of structured products excluding leverage and flow products stood at 5,283 products worth an estimated €8.9bn in the fourth quarter of 2017, compared to the 6,677 products issued in the previous quarter which had an estimated sales volume of €8.5bn, according to SRP data.
SRP data also shows that Vontobel (13%) had the highest market share as a bond provider for tranche-based products during the fourth quarter of 2017 on the back of an estimated €2bn in sales, followed by Amundi (€1.15bn), Landesbank BW (€1.14bn) and Societe Generale (€1bn) with 7% market share apiece.
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