First-quarter figures for block trading venue Liquidnet have shown institutional investors in Europe again trading equities in size. The firm's Europe chief attributed the resurgence to regional stabilisation.
In Europe, Liquidnet's results for Q1 show principal traded reached US$22.6 billion, a 64.7% rise from Q4 2012, and a 38% rise on Q1 2012 figures.
Mark Pumfrey, who took the reins as head of EMEA operations for Liquidnet in December, believes the stewardship of European Central Bank (ECB) chief Marco Draghi has instilled enough confidence in the market to weather recent macro events in the region, facilitating asset managers' move back from fixed income to equities.
"In Europe, interest in equities has increased over the past several months because relative value verses other asset classes is strong and there has been limited new supply in recent years," Pumfrey told theTRADE news.com today.
Despite continued macro difficulties in the region, Pumfrey believes there has been a significant shift in market sentiment since last September following Draghi's July speech outlining the ECB's euro rescue plan.
"Liquidnet has benefitted from greater confidence in the market, which can be attributed in part to Mario Draghi's stabilising role at the ECB, which has helped the market build resilience to recent issues such as Cyprus," he said.
"This boost in confidence means asset managers want to trade block positions in the companies they see long-term value in," Pumfrey said.
Since assuming his role at Liquidnet, Pumfrey has identified business from continental Europe as a major driver of future growth. Before he took over, European asset managers represented only 7-8% of Liquidnet's European base. He plans to increase the volume to 20% over the next 18 months.
Globally, Liquidnet's Q1 results showed a growth in block trading in Asia, where principal traded exceeded US$5 billion for the first time, marking a 20% increase over last quarter, and in the US, where average daily volume was up 25% on Q4 2012, with 44 million shares.