Italy is the third-largest economic system within the European Union and the eighth-largest on this planet by nominal GDP. The Italian capital market has contributed rather a lot in the direction of the expansion of the nation’s economic system. Italy is residence to a few of the world’s largest institutional buyers however the latest tendencies have proven a pointy surge in retail buyers’ participation in secondary markets.

Borsa Italiana, the nation’s main inventory trade has seen important development in retail buying and selling final yr. Based in 1808, Borsa Italiana is predicated in Milan. In 2020, the London Inventory Trade Group agreed to promote Borsa Italiana to Euronext in a deal price almost $5 billion in money, nonetheless topic to a variety of regulatory approvals.

Finance Magnates spoke to Massimo Giorgini, Head of Fairness and Derivatives Markets Enterprise Improvement at Borsa Italiana, to get his views in regards to the latest tendencies in Italian monetary markets together with the surge in retail buying and selling, the impression of prolonged buying and selling hours for fairness derivatives, and the launch of the micro FTSE MIB index micro-futures on the IDEM market.

 

Massimo Giorgini

“Italy is by far essentially the most retail-driven market in Europe, as a lot of the European markets usually are not featured by an analogous contribution to volumes by non-public buyers. Final yr was an distinctive one for us as a consequence of important development. If you check out the Italian fairness markets in 2020, the primary market elevated 40% by trades, which is a exceptional development within the European area but when we dig deeper into the small print we see that retail quantity development carried out higher than the common market, additionally on mid and small-cap equities” Giorgini mentioned.

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When requested in regards to the buying and selling type of retail merchants, Giorgini talked about: “We skilled very refined retail buying and selling methods, with non-public buyers actively and considerably contributing to the value discovery course of additionally throughout essentially the most risky days. Buying and selling that we observe from retail merchants is aware and disciplined, the results of years of academic actions promoted by Borsa Italiana and the retail buying and selling business.

Impression of Prolonged Futures Buying and selling Hours on the IDEM market

“Final yr, in mid-February we determined to increase buying and selling hours for the Italian Derivatives Market as a consequence of rising buyer demand. Now the market is opening up at 8 am CET and shutting at 10 pm CET, principally following the closing time of the American markets. This has been a vital growth as now we have numerous shoppers from the US as they wish to commerce FTSE MIB Index Futures directionally or in opposition to different monetary devices. Throughout FTSE MIB Index Futures and FTSE MIB mini Future, we traded greater than 700,000 contracts solely within the prolonged buying and selling hours final yr, between 8 am CET and 9 am CET and between 6 pm CET and 10 pm CET. An important factor is that on some events, we had days the place 25% of the futures quantity was traded in the course of the prolonged hours. Retail merchants are staying out there until the US market closes within the night,” Giorgini added.

Introduction of the FTSE MIB Index Micro-Futures

Borsa Italiana launched the micro FTSE MIB future (microFIB) on 19 October 2020 to deal with the wants of the retail group. Finance Magnates requested Giorgini in regards to the newly launched contract.

“In 2020, we determined to launch the primary micro index futures in Europe. So now we provide the primary futures contract, a mini futures contract (20% worth of the primary futures contract), micro futures contract (20% worth of the mini futures contract). The FTSE MIB micro futures has a contract worth of 4,000 euros, which means that retail buyers can enter right into a micro futures place with solely 600 euros. With this iniaitive, now we have addressed the rising demand from retail buyers. Along with that, CFD buying and selling merchandise are dealing with rising scrutiny from the European regulators, thus now we have seen a possibility to enter the market offering publicity to the Italian market with a transparent and compelling market proposition, because the product is listed and assured by the Italian clearing home (CC&G), whereas CFDs usually are not. Final however not least, liquidity is supplied by 4 main digital market makers. For the reason that launch in late October, now we have traded greater than 70,000 contracts and we have been capable of hit a brand new quantity report in January. We’re receiving a whole lot of help from the retail buying and selling business and we’re very happy with the outcomes as properly,” Giorgini talked about.

Going Ahead in 2021

“In January 2021, the success has continued throughout the board within the retail and institutional buying and selling, in January this yr, the fairness markets trades have been up 22% in comparison with January 2020 which was already an distinctive month. We’re dedicated to offering a dependable market infrastructure to contributors, and we’re at all times engaged on new initiatives in partnership with member companies and business stakeholders” Giorgini added.

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