2011 was marked by a revitalization of trading activity on the Luxembourg Stock Exchange as a result of the addition of new members, including those from abroad, thus broadening and stimulating market activity.
Despite difficult economic conditions, the Luxembourg Stock Exchange maintained its leading position in the field of listing.
Its policy of diversification, including the development of tools for financial sector professionals that enable them to meet legal and regulatory requirements, continued its expansion. Among others, this is particularly notable in its tools to meet UCITS IV requirements created by the exchange’s subsidiary, Finesti.
2011 was also characterized by the election of Frank Wagener as chairman of the board of directors of the Luxembourg Stock Exchange, as well as the establishment of a new corporate identity through which the exchange wishes to demonstrate its diversification policy and core values while giving a new impulse to its communication.
Market Activity
During 2011, the Luxembourg Stock Exchange continued its efforts to attract foreign members to its secondary market. A large proportion of transactions during the year came from members established outside Luxembourg, especially from those in Belgium (25% of trades), France (15%) and the Netherlands (39%). Additionally, companies from Germany and Luxembourg joined the market during the year and are now trading on the UTP (Universal Trading Platform) platform used by the Luxembourg Stock Exchange.
On 30 December 2011, the total transaction volume on the Luxembourg Stock Exchange stood at an amount of EUR 262.44 million, representing an increase of 19.75% compared to 2010. The bond segment recorded a significant increase of 163.46% over one year. Fixed income securities trading volumes accounted for 55.02%, or EUR 144.40 million in absolute terms. Growth in the bond segment was the object of a specific development strategy and almost 1,200 bonds are now tradable in continuous mode. This strategy is aimed at market makers, who offer executable prices during the entire trading session and therefore contribute to liquidity and transparency on the secondary market in Luxembourg.
LuX Down
The LuxX closed the year at 1,135.10 points, a decrease of 26.39% compared to 2010. The highest level was reached on 17 February 2011 at 1,532.61 points, and the lowest on 23 November 2011 at 1,036.91 points. The performance of the LuxX is in line with the trend for European stock exchanges during the course of 2011.
Mixed Results for Listing Activities
In an adverse environment created by the sovereign debt crisis in the euro area, the Luxembourg Stock Exchange maintained its position as regards the listing of international securities. In 2011, it admitted 9,045 new securities against 9,350 in 2010, a decrease of 3.26%.
For the two markets operated by the Luxembourg Stock Exchange, the breakdown of new securities was as follows: 7,982 securities were admitted to the “Bourse de Luxembourg” regulated market and 1,063 were admitted to the Euro MTF market. In terms of types of instruments, new listings were composed of 5,921 bonds, 822 investment funds, 33 shares and depositary receipts and 2,269 warrants.
The Luxembourg Stock Exchange listed two loans issued by the European Union in January 2011 with the aim of assisting countries in the euro area, one from the European Financial Stabilisation Mechanism and the other from the European Financial Stability Facility.
With regard to shares, the majority of instruments listed are depositary receipts from issuers mainly in India and Taiwan. The exchange consolidated its position in this field reaching the milestone of 250 depositary receipt issuers on 20 July 2011. Worldwide, 9% of IPO capital raised via depositary receipts in 2011 was from depositary receipts listed on the Luxembourg Stock Exchange, putting it in third position behind London and New York, based on the most recent figures to the end of November 2011.
In total, on 30 December 2011, the Luxembourg Stock Exchange had 44,369 quotation lines against 44,916 in 2010, a decrease of 1.22%. Bonds and warrants are still the most important segments, with 29,243 and 8,346 lines respectively.