Deutsche Boerse, the dominant stock market operator, is not giving up on plans to muscle in on the niche of German rival Stuttgarter Boerse despite the modest success of its efforts to date, a Boerse official told Reuters.
Rainer Riess, managing director stock market business development, told Reuters that Boerse would extend its marketing efforts to convince retail investors in the growth market for warrants and investment certificates to trade in Frankfurt.
"We offer the highest quality in leveraged products for retail investors, this message we want to stress further," he said in a recent interview as he defended the Boerse's one-year-old Smart Trading initiative. The September 2003 scheme targeted private investors too small to deal on Boerse's Xetra screen-trading system and was initially aimed at warrants and certificates trading and later extended to all 110 shares in the DAX, MDAX and TecDax indices.
Smart Trading rules oblige issuers to publish bid and ask quotes continuously between 0900 and 2000 local time (0700-1800 GMT) and guarantee prices, and also demand that specialist market makers execute orders within 30 seconds.
While the initiative gave investors more certainty that orders would be executed in full at the best possible prices, it has done little to trim Stuttgarter Boerse's market share of some 34 percent, or average daily volume of 200 million euros ($244 million).
By the time Deutsche Boerse felt a need to go after the popular segment - driven by a need to grow the business and lift returns for its shareholders - Stuttgart had a four-year lead and investor habits were entrenched.
Analysts said an appetite for a greater role in retail derivatives had also been a driver in Boerse's efforts to merge with SWX Swiss Exchange, where such products are popular too.
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