This report focuses on the performance of Euronext Milan, nearly two years after the migration to the Optiq® trading platform.

The strength of ‘Made in Italy’ equity trading

Euronext Milan continues to solidify its position as a leader in European equity trading, driven by robust market performance, growing trading volumes, and significant improvements in market quality. In 2023, the FTSE MIB index delivered exceptional gains, outperforming major global benchmarks, fueled by a strong banking sector. 

Following the Optiq® migration, Euronext Milan demonstrated enhanced liquidity, tighter spreads, and increased presence at the European Best Bid and Offer (EBBO), reaffirming its dominance as the preferred venue for trading Italian securities.

Executive Summary

1. Performance: Milan outperformed other markets, with the FTSE MIB index climbing 28% back in 2023, outpacing the US (S&P 500 up 25%) and broader European markets (Eurostoxx 50 up 19%), largely driven by gains in the banking sector as a result of increased interest rates.
2. Trading Value Growth: Euronext Milan's daily trading value exhibited steady growth, particularly notable after the Optiq® migration in March 2023, with Milan's contribution to Euronext volumes peaking at 31% in H1 2024. The Italian market maintains a robust domestic ecosystem, with local brokers accounting for over 30% of volumes. Euronext Milan remains the preferred venue for trading on Italian securities, stably increasing its market share, consistently above 71%.
3. Market Quality Improvement on FTSE MIB: Following Optiq® migration, market quality metrics for Euronext Milan registered a long-term improvement.
   1. The average spread decreased by 1.3 bps, from 5.8 bps to 4.5 bps;
   2. Liquidity around BBO increased by an average of +€8.2K, from €45.4K to €53.6K;
   3. The percentage of EBBO setting events by Euronext Milan increased from 49.7% to 66.1% post-migration, making the venue +24.8% more present at unique times at EBBO.
4. Market Quality on FTSE MID:
   1. On less liquid stocks, such as the components on FTSE MID, Euronext Milan outperforms other MTFs in market quality leading in key metrics such as EBBO setting percentage (73.7%) and unique time presence at EBBO (82.0%).
   2. In terms of liquidity, Euronext Milan also offers the highest notional liquidity around BBO at €10.6K.

Methodology

• Market quality metrics are analysed for the main Indexes representing Euronext stocks. Trading venues considered are Euronext, Cboe Europe (Cboe), Aquis Europe (Aquis) and Turquoise Europe (Turquoise).
• The market quality data in this study is sourced by the independent provider BMLL Technologies. The Welch t-test is conducted to assess statistically significant changes in metrics, with the first period spanning 2022 through March 2023 (prior to the Optiq® migration) and the second period covering from 27 March 2023 (post-migration) through the end of September 2024:
  • Average Spread: the mean bid-ask spread of the day, given in basis points relative to the mean mid-point price.
  • European Best Bid & Offer (EBBO) Setting: the number of events where a venue improved the consolidated best ask and bid price, as a percentage of the number of all consolidated ask and bid price improvement events for the instrument.
  • Liquidity around BBO Notional (€K): the time-weighted average amount of notional around the BBO.
  • Liquidity around BBO Number of Shares (K): the time-weighted average amount of shares around the BBO.
  • Unique Time Presence at European Best Bid & Offer (EBBO) in percentage: The percentage of time during continuous trading when a venue is the sole one at the consolidated best bid and ask price.

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November 2024 

A story nearly as old as the stock exchange

The Amsterdam stock exchange, now known as Euronext Amsterdam, is considered to be the world’s oldest functioning stock exchange. Its roots go back to 1602, when it was established to help fund the Eighty Years’ War. 

How the exchange was born

In 1567, the Spanish Empire gained control of a wide area of the Low Countries, triggering the Eighty Years’ War as the Dutch fought to regain control of their country. At this time, a key source of Dutch income came from merchants, who relied heavily on sea trade. They would buy spices from the Portuguese, who had mastered the spice routes in the Far East, and resell them to Dutch buyers. This was the beginning of the Amsterdam stock exchange, arguably the world’s first stock market, and certainly the first truly liquid stock market. However, in the course of the war, the Spanish gained control of Portugal, and effectively put a stop to this trade.

A heroic act

In 1622, with the war still ongoing, the Spanish side attempted to blow up the Amsterdam stock exchange building, in order to limit funding for the Dutch war effort. At the time, the exchange building was built on arches over the Rokin canal. The Spanish soldiers managed to moor a ship filled with gunpowder under the building. Luckily, a little orphan boy discovered the ship and raised the alarm. The boy’s quick action saved the city from disaster. As a reward, he was granted his greatest wish: to play the drum alongside other orphans inside the Amsterdam exchange building itself, where the building’s excellent acoustics would magnify the sound of the drums. 

Celebrating today: Exchange Drumming Day

To this day, Euronext Amsterdam continues this tradition by inviting school children from 6 to 12 years old to play the drums inside the exchange building. Trading on the stock exchange typically opens with a Gong Ceremony, broadcast on the Dutch business news channel RTL Z, where special guests strike the Gong to mark the start of the trading day. On Exchange Drumming Day, school students become the special guests. 

The children are each given drums to play, and can explore the impressive trading floor while drumming enthusiastically. They then take part in a traditional Gong Ceremony and the Amsterdam Gong is struck to remember the heroic actions of the little orphan boy many years ago. The programme combines fun with education, including a short lesson on the stock exchange and financial literacy in advance of the event when possible. The fun-filled day is one that Euronext hopes to continue hosting for many years into the future. 

Inviting children to participate in a stock exchange event like this one is an example of ‘learning by doing’, and supports our company purpose to shape capital markets for future generations. It is one of a number of activities that Euronext Amsterdam deploys throughout the year to improve financial literacy.

Other Amsterdam traditions: an exchange rooted in history

The Amsterdam stock exchange prides itself on its ability to uphold important traditions. To this day, a statue of Mercury is still handed out to listing companies on their first day of listing. Mercury is the Roman god of communication, travel and trade. For centuries, he has symbolised the exchange in the Netherlands in many guises. As early as the 17th century, a statue of Mercury adorned the main facade of the Beurs van Hendrick de Keyser in Amsterdam. The figure of Flying Mercury has been associated with the Amsterdam exchange trading since 1845 when King Willem II bestowed the first statue at the opening of the Beurs van Zocher, and today new issuers are given a replica of the statue to mark their listing on Euronext.

Perpetual bond

The world’s oldest bond still paying interest is a 2.5% perpetual loan issued in 1624 by the Lekdijk Bovendams water board. This bond, worth 1200 guilders, was issued to finance levee repairs after a burst. What has made the 1624 debenture so special is the fact that after nearly four centuries, it still pays interest, €15 annually.

This bond symbolises financial reliability and highlights the Netherlands’ financial strength, rooted in its historic battle against water. This constant threat necessitated cooperation and financial preparedness, even among rivals like the Bishop of Utrecht and the Count of Holland. In September, we once again paid out the dividend to charity.

Gong ceremony

The gong tradition, however, goes back even further, to 1592 to be precise. That year, the Amsterdam city council tried to create order and regularity in trading, which then took place at the Nieuwe Brug, with the introduction of the first regulations. Rules of conduct, fixed trading hours, and an exchange clerk were introduced. At regular intervals, the exchange clerk sounded a bell to open the exchange. Euronext Amsterdam still sounds the gong around three times per week to open a new day of trading. Even when there is no ceremony, the sound of the Gong still echoes over the enormous trading floor.