H1 2014 European equity trading league tables

After a strong first quarter European cash equities trading continued to see a rise in volume in the following three months, with aggregate turnover reported by contributing clients up by nearly a quarter in the first half.

• Total equity turnover in Europe increased by €923bn from the first six months of 2013, with participating clients reporting €4,817bn of flow
• Western European markets saw the largest rise, although Nordic markets reposted the greatest percentage rise in volumes
• Volumes in Eastern Europe did not fare as well, falling by 8%
• ETF trading increased by 20% with market leader Blackrock reporting the largest rise in liquidity

This analysis accompanies a summary of European cash equity and ETF trading for H1 2014 using Markit's suite of equity products. Markit MSA covers an estimated 75% of all cash equity trading in Europe across traditional exchanges, multi-lateral trading facilities and over-the-counter markets. Trade data is sourced directly from contributing brokers and represents what was actually traded, differentiating it from other surveys that rely on indications of interest or trade adverts.

For the full H1 2014 European Cash Equity and ETF Broker Rankings report click here.

After starting out the year on a high, the 23 contributing brokers to Markit MSA reported an aggregate €4,817bn of turnover for the first six months of the year. This represents a jump of over €920bn from the same period last year. We highlight some of the trends driving this strong performance.

Western Europe flows continue to rise

Most of the turnover seen in European equities came from core trading Western European markets. This part of the region saw turnover increase by €800bn to take aggregate flow to €4,168bn. This sees the region responsible for over 86% of all cash equities turnover in Europe.

As for the brokers best able to capture this rising flow, we see Morgan Stanley again topping the list with 17% of total business. The competition for second place saw Bank of America Merrill Lynch edge out UBS in a closely run race.

A surge in UK and French turnover was the largest contributor to improved regional flow. Trading in FTSE 100 shares increased by €211bn in the first six months. French large caps also saw a strong surge in turnover as brokers reported €620bn of business in CAC constituents. This large lift in turnover is also echoed lower down the market cap scale, as small and midcap French and British indexes saw much larger percentage jumps in turnover than their large cap peers.

Investors are still clamouring for exposure to Southern Europe as the FTSE MIB and Ibex 35 volume continued to climb after a strong Q1.

DAX constituents combined to make the third largest index by volume, although turnover was only up 2% on from the previous year, marking a fall in real terms.

Nordics also strong

Relative to their Southern European peers, Nordic equities saw a larger jump in turnover when compared to the previous year as turnover in the region was up by 28%. Deutsche Bank was able to cement its top position in the region's league table with €106bn of flow, putting it ahead of Bank of America Merrill Lynch and Morgan Stanley.

Eastern Europe falling

While the rest of Europe proved resilient, economic and political uncertainty in Eastern Europe saw a fall in trading for the region, with aggregate turnover falling by 8% from the previous year.

ETFs continue to climb

In the ETF space, the strong inflows seen in European listed funds look to boost trading in the region. Overall turnover in the asset class is up by 20% to €183bn. Unlike the cash equities table which saw most brokers largely hold their spot from the previous year, the ETF league table saw six of the top ten brokers change spots over the first six months of the year from the same period in 2013.

This change at the top has played into the hands of French brokers as Societe General jumped by four spots to grab the top spot, while BNP Paribas rose 11 places to grab the last step of the podium in third. BNP's strong showing was mostly driven by a sturdy performance in its fixed income and Commodities business.

Issuer wise, Blackrock's strong lead in the AUM table saw it grab the lion's share of turnover as its funds saw €76bn of turnover, over two and a half times the figures seen in Societe General ETFs which had just over €29bn of turnover.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.