EuroMTS and Euronext have formed a joint venture to launch what they say is the first “genuinely independent and transparent pan-European government bond indices.” The indices, collectively known as the EuroMTS Index, are based on real time tradable prices from the MTS Group.
The partners say the EuroMTS Index is designed to ensure optimal transparency, replicability, homogeneity a s well as being fully representative of the euro-denominated government bond market.
The EuroMTS Index is a successor to the established CNO Etrix in France, which is used by a number of French institutional investors. Intra-day Index values are distributed via Reuters and will soon be available via other data vendors.
“The partnership of EuroMTS and Euronext once again sees the cooperation of our organisations in the European capital markets and will undoubtedly enhance the delivery of the new reference tool in the eurozone,” says Jean-Franois Thodore, Chief Executive Officer of Euronext . “These indices will create a new marketplace for Exchange Traded Funds (ETFs), futures & options and other financial products based on bond indices.”
Gianluca Garbi, Chief Executive Officer of EuroMTS, added: “The EuroMTS Index is based on the uniqueness of MTS Data, which offers the best real time prices in the euro government bond market. Institutional investors, fund managers and producers of financial instruments will recognize the advantages of this index which will offer them a standardised benchmark for structuring their financial products.”
Euronext holds one-third of the shares of the new company, MTSNext, which is responsible for the management of the EuroMTS Index, with the remainder of the shares being held by EuroMTS. Scott Stark, who assumes the position of Chief Executive Officer, will lead the development of the indices. A Technical Committee, composed of leading figures from all sectors of the bond industry – Treasuries, investment banks and fund managers – will assist in determining the construction, maintenance and future expansion of the EuroMTS Index. EuroMTS is responsible for the calculation of the Index and for this purpose uses a proven and robust technology infrastructure provided by ION Trading Limited.
The EuroMTS Index family replicates the performance of the euro-government markets. The family is comprised of a global index and six sub-indices based on maturity ranges: 1-3, 3-5, 5-7, 7-10, 10-15, 15+ years. Prices for all bonds are provided by more than 250 market participants contributing real-time prices that are tradable across the various platforms of the MTS Galaxy. These prices are distributed to the wider market via quote vendors. EuroMTS is responsible for the calculation and the dissemination of the indices. Through representative samplings and bond weightings, the EuroMTS Index replicates the total return of the entire Eurozone government bond market by making use of a limited number of bonds. EuroMTS says this feature of the index design enhances the product’s replicability. EuroMTS Index is currently published on Reuters: “CNOINDEX” and “CNOCLOSE”; and on Bloomberg: “CNO”.