Summer lull fails to dent strong 2014 European equity trading

European equity market volumes slowed in August but remain considerably higher than a year ago as the turnaround of 2014 continues.

European equity market volumes slowed in August but remain considerably higher than a year ago as the turnaround of 2014 continues.

Trading volume by share value across both lit and dark order books dipped 13.2% from €788.2 billion in July to €684.2 billion last month, according to figures from Thomson Reuters Equity Market Share Reporter, though this is broadly in line with seasonal expectations.

Traded share value was 7% higher than the €639.25 billion in August 2013.

While liquidity dipped in August, share values were on the up across Europe following expectations that the European Central Bank will begin quantitative easing soon.

BATS Chi-X Europe saw its market share recover slightly after seeing it slip back for much of the year so far. Its overall market share across its two order books was 21.38% in August, up from 20.81% in July.

London Stock Exchange Group, currently the largest equity exchange group in Europe by market turnover, saw it share fall back across its three exchanges. London Stock Exchange’s market share fell from 11.6% to 11.29% between July and August, while its pan-European Turquoise dipped from 9.8% to 9.39% over the same period. It’s Italian exchange’s market share fell to 7.11% from 7.5%.

Deutsche Börse’s Xetra exchange system was able to increase its share of European trading, up from 11.52% to 12.4%.

Since becoming independent in an IPO by former owner Intercontinental Exchange in June, trading volumes at Euronext have remained largely flat so far representing a share of 15.6% in both July and August.

Dark trading volumes on multilateral trading facilities (MTFs) have seen strong performance all year and August was no exception, with activity up 27% year-on-year to €44.64 billion. However, between July and August activity did dip slightly and dark trading’s overall share of the European equity market dropped from 6.8% in July to 6.52% in August.

Most of the major players in European dark MTF trading saw their market share expand, with market leaders UBS and BATS Chi-X Europe seeing their shares increase.

Agency broker Instinet’s POSIT block trading platform managed to edge into third place, increasing its market share from 13.38% to 14.48% between July and August. Meanwhile London Stock Exchange’s Turquoise saw dark volume fall slightly from 14.68% to 14.28%, pushing it into fourth.

With strong equity trading activity across Europe in 2014 after several difficult years, market participants will hope that any quantitative easing (QE) by the ECB doesn’t reverse the rotation into equities seen since the US Federal Reserve announced it would begin tapering its own QE support for the economy, which could have knock on effects for liquidity.