London moved back ahead of Amsterdam as Europe’s largest share trading centre in June, reclaiming the top spot for the first time this year after Brexit pushed much of the city’s volumes to the continent.
An average €8.92 billion of shares a day were traded on various London venues in June, compared with €8.8 billion for various Dutch venues, according to data from Cboe Europe.
This compares with about €9.4 billion average daily trading value for Amsterdam in May and about €8.7 billion in London. Paris, the third-largest venue, saw its daily trading decline from almost €6.1 billion in May to €5.8 billion in June.
Welcome boost
While London’s return to the top spot is a welcome boost for a UK finance industry buffeted by Brexit, the city’s lead over Amsterdam is a fraction of what it was before the end of the transition period. In December, London’s share trading volumes stood at €14.3 billion compared with €2.2 billion for Amsterdam, according to Cboe data.
Britain lost its rights to access the European Union’s single market on December 31st and the bloc has not permitted investors inside its borders to trade shares in companies such as Airbus SE and BNP Paribas SA from the UK. The EU could eventually reopen access by recognising the UK markets as equivalent to its own, though there is little sign of movement in this process.
London has gained some volumes this year from Swiss equity trading, which resumed after the UK dropped out of an EU-wide ban that has been in place since 2019.
The shifts in trading volume between cities is unlikely to have much of an impact on the bottom line for brokers and trading platforms. The region’s biggest players, including the London Stock Exchange Group Plc and Cboe, operate venues in both London and the EU, enabling them to grab a share of the business no matter the location.
Plans
But the change is a symbolic fillip for the city and comes the same week that chancellor of the exchequer Rishi Sunak outlined plans to maintain London’s status as a top financial centre.
“The return of Swiss share trading has helped overturn what has been just a temporary phase,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “London will soon regain the status of European and global trading hub and it could easily benefit from being away from the restrictive EU rules.” – Bloomberg
