In Focus no. 68, two of the Exchange's market analysts, Allan H. Olsen and Kim Mortensen, have measured liquidity on the Copenhagen Stock Exchange over a four-year period. Moreover, they have compared liquidity on the Danish equity market with that on the exchanges in Stockholm and Oslo. The analysis concludes that liquidity in Danish shares in terms of market cap is fully on a par with the liquidity on the exchanges in Stockholm and Oslo.
Since 1999, increasing order coverage has provided a better and more precise price picture. In 2003, there are simultaneous buying and selling prices throughout the entire opening time in the primary indices KFX, MidCap+ and SmallCap+. This very positive development shows that investors to an increasing extent use the Copenhagen Stock Exchange as the marketplace for Danish shares.
At the same time, the difference between buying and selling prices, the socalled spread, has narrowed. In respect of the KFX shares the spread has been reduced by 50 per cent to 0.5 per cent and the MidCap+ and SmallCap+ shares have seen even greater improvements.
The analysis also shows that the price formation in Copenhagen is just as efficient as in Oslo and Stockholm.
Read the article "Measuring liquidity on the Copenhagen Stock Exchange" in Focus no. 68.
