Revenues for the MTS Group for the financial year are projected at €60.4 million, with pre-tax profits estimated at €5.3 million. The revenue level is substantially flat in comparison to 2003 as the overall cost of trading per million for cash, repo and BondVision decreased by 10 euro cents to €1.34 (€1.44 in 2003). The cost reduction was possible due to higher turnover and the growth of data sales.
In 2004, MTS continued its expansion into the New EU States with the launch of MTS Poland in November and the continued expansion of NewEuroMTS, a market dedicated to trading the euro-denominated debt of the states new to the EU. Average monthly volume on NewEuroMTS was up 211% for the five-month period ending in November versus the market’s initial six months.
In addition, MTS launched dedicated markets for quasi-government bonds, benchmark linkers and Treasury bills in 2004 and announced plans for a January 2005 launch of an electronic swaps market in partnership with ATFox. The new swaps market will benefit from the wide distribution of the MTS network, which connects more than 400 institutions across Europe. Furthermore, the EuroMTS Index family continued in its enlargement with the launch of indices tracking the New EU States and the linkers market, and with the creation of exchange-traded funds and structured products tracking the indices. Over 200 billion of assets under management are now referenced to the EuroMTS Indices. Yield performance levels of the EuroMTS Index family provided positive returns, as follows: Global EuroMTS Index Total Return with 7.63%; EuroMTS inflation-linked index with 11.51%; and NewEuroMTS index with 10.48% (based on data from January 2, 2004 to December 21, 2004).
Participation in the MTS markets continued to grow as well. BondVision saw a 19% increase in the number of dealers to 31, while the number of clients rose by 35% from 2003. The number of MTS market participants also grew by 2.5%, reflecting continued support of MTS’ objectives of liquidity, efficiency and transparency. The MTS Group connects more than 1080 participants across Europe through its single network. In the coming year, MTS anticipates continued growth via the launch of additional markets along with enhancements to existing products and markets. Because the marginal cost of creating new MTS markets is small, participants can easily connect to new markets or add new products.
Technology developments in 2004 have been significant with the introduction of numerous value-added functionalities and the possibility to access the MTS cash markets via the Internet. Furthermore, all the major technology contracts have been renegotiated paving the way for the further evolution of the MTS technology software and hardware architecture towards a modular, flexible and cost-effective system with greatly enhanced functionality. This will allow the Internet to be a secure and efficient alternative means to access the MTS markets. The first phase of the migration to the new hardware will be the introduction of the new Money Market platform in summer 2005.
MTS Group
The MTS Group of companies collectively comprises Europe’s premier electronic market in fixed-income securities with average transaction volumes of 85 billion euros a day (single-counted). The MTS model utilizes a common trading platform, although corporate governance and market supervision remain with the domestic financial community. The MTS Group of companies include the following wholesale markets: EuroMTS, EuroCredit MTS, NewEuroMTS, MTS Quasi-Government Market, Eurobenchmark Treasury Bills Market, EuroMTS Linkers Market, MTS Amsterdam, MTS Austrian Market, MTS Belgium, MTS Denmark, MTS Deutschland, MTS España, MTS Finland, MTS France, MTS Greek Market, MTS Ireland, MTS Italy, MTS Poland and MTS Portugal. The Group also includes BondVision, the Internet-based multi-dealer-to-client platform and MTSNext, the company that manages the EuroMTS Index, the first real-time transparent and independent pan-European government bond index. Tradable products on the Telematico markets comprise Austrian, Belgian, Czech, Danish, Dutch, Finnish, French, German, Greek, Hungarian, Irish, Italian, Lithuanian, Polish, Portuguese, Slovakian and Spanish government bonds, quasi government bonds of EIB, KfW, Freddie Mac and CADES, Pfandbriefe, Obligations Foncières, Cédulas Hipotecarias and UK covered bonds.
More information is available on www.mtsgroup.org
