Multilateral trading facilities (MTFs) have grown their overall market share in Europe through trading of mid-cap stocks and minor indices during the second quarter of this year.
The findings come as part of agency broker CA Cheuvreux's monthly Market Indicators report for May and June, produced in conjunction with transaction cost analysis provider TAG. The report calculates trading venues' market share of stock market indices based upon their turnover.
The report noted that the three largest MTFs all recorded gains in overall market share. According to data from TAG, Chi-X grew to 18.5% from 17.9% during the previous quarter, BATS' share increased to 5.8% from 5.1%, while Turquoise saw market share growth to 4% from 2.5%.
CA Cheuvreux noted that the market share for these three MTFs had not improved substantially for the blue-chip indices it analyses, which points to growth in less liquid and mid-cap indices.
“Fragmentation is currently moving at a faster pace on other minor indices and even in mid-caps, such as the FTSE250, the SBF120 and the MDAX,” read the report.
The research also found that Deutsche Börse and SIX Swiss Exchange were the only two primary markets to have lost domestic market share in blue chips over recent months, with the German exchange dropping to 69% in June, from 74% in April. However, over the whole of the second quarter, Deutsche Börse's overall market share increased to 71.9% in Q2, compared to 71.1% in Q1.
SIX Swiss Exchange on the other hand lost 5% of its market share to Chi-X Europe and BATS Europe over the last quarter, recording 71.3% of Swiss blue-chip trading at the end of June. The report also notes that the London Stock Exchange lost 3 percentage points of market share during Q2, with Chi-X Europe breaking the 30% barrier for FTSE 100 stocks on a number of occasions.
Broadly, CA Cheuvreux's Market Indicators found that increased volatility during Q2, especially during May, resulted in wider spreads across Europe and less time spent at the European best bid and offer across all venues.