MTS further strengthened its already dominant role in the European fixed-income market in 2003 by exporting its domestic market model to additional countries, launching MTS Austria and MTS Greece and thereby completing its presence across all 11 eurozone bond markets. Beyond the eurozone, MTS launched MTS Denmark, NewEuroMTS (a market for trading debt of the 10 new states of the European Union) and entered into agreements with Poland and Israel to open domestic MTS markets in those countries in 2004.
Meanwhile, turnover on MTS markets remained robust with daily average volumes rising a combined 10.7%*. Especially significant was a 14%* increase in volume on the repo market, which resulted in € 12.6 trillion traded for the year, and a more than 75%* surge for both turnover and the number of participants on the BondVision dealer-to-client market. Through new markets and new participants, MTS has been able to lower the unit cost per trade on the inter-dealer system by 29% year on year since 2001.
In addition to expanding its proven domestic market model to other European countries, MTS moved into complementary businesses, including the EuroMTS Index, which was launched in May 2003 in response to the need for a truly independent, real-time pan-European government bond index. The Index, based upon actual prices traded on the MTS markets, quickly garnered interest from institutional investors who recognized the benefits of transparency, reliability and its easily replicable structure. The introduction of the Index was followed by the creation of two exchange-traded funds (ETFs), traded on Euronext Paris and Borsa Italiana, by a leading ETF manager in the first half of 2004.
MTS’ well-established European network, which included 540 participants in 2003 and connects every major bank across Europe, means that the marginal cost of creating new MTS markets is small. MTS will continue to pursue opportunities to bring the benefits of transparency, efficiency and liquidity associated with its dealer-to-dealer and dealer-to-client markets to both additional countries and to more asset classes, expanding into areas complementary to its core business.
*Growth over 2002
