Stock exchange turnover for investment and leverage products on Europe’s financial markets rose during the third quarter, with a quarter-on-quarter increase of 20% and a year-on-year increase as high as 34%.
The European structured products market saw increasing turnover and higher volumes in the third quarter of 2019 with almost €277 billion (US$306.8 billion) invested in European structured product exchanges, according to the European Structured Investment Products Association (Eusipa). Turnover in the third quarter totalled €30.7 billion.
Third-quarter turnover in investment products on European exchanges stood at €14.3 billion, 46.6% of the total. This represents an increase of 24% on the previous quarter, and a significant jump of 74% on the same quarter of the previous year.
The negative to low interest rate environment clearly helps structured products, at least in markets where they are not underprivileged in the national regulatory environment, Eusipa secretary general Thomas Wulf (pictured) told SRP.
“Where investors have the choice they can leverage the full opportunities by composing baskets, currencies and maturities into a solution that matches their yield/risk expectation,” he said. “A caveat, of course, has to be made for fully capital- protected products which of course cannot be offered at the moment, for structural reasons, in Euro or CHF given the current interest level and bond markets.”Turnover in leverage products including warrants, knock-out warrants and constant leverage certificates stood at €16.4 billion in the period from July to September, 53.4% of the total. Exchange-based turnover increased 17% on the previous quarter, and was up 12% on a year-on-year basis.
At the end of September, trading venues located in Eusipa member countries had on offer 562,960 investment products and 1,367,729 leverage products. The aggregate listed product offering was relatively unchanged compared with the previous quarter, but up 10% on a year-on-year basis.
Banks issued a total of 1,303,707 new investment and leverage products in the third quarter of 2019, a 10% increase on the period of April to June, and a 16% year-on-year increase. In total, 170,992 new investment products were launched, accounting for 13.1% of new issuances, whereas the 1,132,715 new leverage products represent 86.9% of the total.
For Austria, Belgium, Germany and Switzerland, the market volume of investment and leverage products recognised as securities stood at €276.8 billion at the end of the third quarter – a 6% rise year-on-year and a 1% increase on the previous quarter.
At the end of September, the market volume of investment products stood at €266.9 billion – an increase of 1% quarter-on-quarter and 5% year-on-year.
The outstanding volume of leverage products totalled €9.9 billion at the end of September. This represents an 8% increase on the previous quarter, and an even larger year-on-year increase of 28%.
The members of Eusipa who provide the figures for the market report include: Zertifikate Forum Austria (ZFA), the Belgian Structured Investment Products Association (Belsipa), Association Française des Produits Dérivés de Bourse (AFPDB), Deutscher Derivate Verband (DDV), Associazione Italiana Certificati e Prodotti di Investimento (Acepi), the Netherlands Structured Investment Products Association (Nedsipa), the Swedish Exchange Traded Investment Products Association (Setipa), and the Swiss Structured Products Association (SSPA).