MTS Germany and EuroMTS say they have reinforced their overall lead in Europe in the electronic trading of German fixed-income products as their turnover in Bunds, Kreditanstalt fr Wiederaufbau (KfW), Pfandbriefe and Lnder securities reached a new record level of €43,6 billion 1 on both markets during August. “Furthermore,,” say the companies, “liquidity for these products is expected to increase with the introduction of a central counterparty (CCP) for cash transactions on MTS Germany and the launch of the Basis Trading Facility (BTF) later this month.”
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financial institutions will be supporting the BTF, which will further extend the scope of trading in German products. The launch of the BTF on September 17, coinciding with the introduction of a CCP for the cash segment of MTS Germany, will allow for fixed income securities to be traded against Eurex’s German government bond futures, as well as LIFFE’s Swapnote futures. “The BTF will have the advantages of MTS’s wide distribution, which includes over 130 participants on both MTS Germany and EuroMTS, and will provide trading anonymity as per market standard,” says Euto MTS. “The BTF will also offer the most competitive transaction fees in the market.”
Daily volumes have averaged €2 billion across German fixed income securities on MTS Germany and EuroMTS,of which about €900 million are in Bunds, €620 million are in Pfandbriefe and €300 million in KfW. The Bubill segment saw record daily volume of €450 million. Euro MTS says the relatively uniform distribution of the trading activity among its 58 participants is further evidence of success.
“The strong response and growing enthusiasm for trading German fixed income products on MTS underlines the efficiency gains that the MTS business model offers the market,” says Gianluca Garbi, Chief Executive Officer of EuroMTS. “The constant need to fight costs and increase efficiencies will continue to drive the market towards one or two dominant pan-European solutions for bond trading.”
The German Finance Agency, Finanzagentur, went live as an observer on MTS Germany in early August.