Stock market

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So the third response of Europe’s bourses to their battle has been pan-European co-operative ventures that could anticipate a bigger European market. There are more wishful words here than deeds. Work on two joint EC projects to pool market information, Pipe and Euroquote, was abandoned, thanks mainly to hostility from Frankfurt and London. Eurolist, under which a company meeting the listing requirements for one stock exchange will be entitled to a listing on all, is going forward–but this is hardly a single market. As Paris’s Mr Theodore puts it, "there is a compelling business case for the big European exchanges building the European-regulated market of to-morrow" Sir Andrew Hugh-Smith, chairman of the London ex­change has also long advocated one European market for profes­sional investors

One reason little has been done is that bourses have been coping with so many reforms at home. Many wanted to push these through before thinking about Europe. But there is also atavistic nationalism. London, for example, is unwilling to give up the leading role it has acquired in cross-border trading between institutions; and other exchanges are unwilling to accept that it keeps it. Mr. Theodore says there is no future for the European bourses if they are forced to row in a boat with one helmsman. Amsterdam's Baron van Ittersum also emphasises that a joint European market must not be one under London's control.

Hence the latest, lesser notion gripping Europe's exchanges: bilateral or multilateral links. The futures exchanges have shown the way. Last year four smaller exchanges led by Amsterdam's EOE and OM, an options exchange based in Sweden and London, joined together in a federation called FEX In January of this year the continent's two biggest exchanges, MATIF and the DTB, announced a link-up that was clearly aimed at toppling London's LIFFE from its dominant position Gerard Pfauwadel, MATIF's chairman, trumpets the deal as a precedent for other European exchanges. Mr Breuer, the Deutsche Borse's chairman, reckons that a network of European exchanges is the way forward, though he concedes that London will not warm to the idea. The bourses of France and Germany can be expected to follow the MATIF/DTB lead.

It remains unclear how such link-ups will work, however. The notion is that members of one exchange should be able to trade products listed on another. So a Frenchman wanting to buy German government-bond futures could do so through a dealer on MATIF, even though the contract is actually traded in Frankfurt. That is easy to arrange via screen-based trading: all that are needed are local terminals. But linking an electronic market such as the DTB to a floorbased market with open-outcry trading such as MATIF is harder Nor have any exchanges thought through an efficient way of pooling their settlement systems

In any case, linkages and networks will do nothing to reduce the plethora of European exchanges, or to build a single market for the main European blue-chip stocks. For that a bigger joint effort is needed It would not mean the death of national exchanges, for there will always be business for individual investors, and in securities issued locally Mr Breuer observes that ultimately all business is local. Small investors will no doubt go on worrying about currency

risk unless and until monetary union happens. Yet large wholesale investors are already used to hedging against it. For them, investment in big European blue-chip securities would be much simpler on a single wholesale European market, probably subject to a single regulator

Реферат опубликован: 3/03/2010