Investment Banks Are Rewarded By Volume Surge In European Stocks
European stocks have swung this year from a central-bank-fueled rally to a Greece-induced slump and back up. The upshot for investors? A resurgence in volume.
After years of shrinking trades and commissions, stock desks in Europe are finally seeing a pickup. Investment banks including Societe Generale SA, UBS Group AG and Deutsche Bank AG have reported a surge in equity trading revenue in the second quarter. The value of stocks traded jumped 25 percent to 1.4 trillion euros ($1.5 trillion) in the first half of 2015, the highest since at least 2009, data from research firm Markit showed.
Volatility and investor interest have led to a recovery in trading, according to Manish Singh of Crossbridge Capital.
?You?re seeing much better earnings in Europe, driven by a weak euro and improvements in the economy, so that?s brought people to the market,? said Singh, who oversees about $2 billion as Crossbridge?s head of investments in London. ?In the second quarter, Greece created volatility and that in turn brought in more trades. That you?re seeing better volume is the basis for being long European financials.?
Unprecedented monetary easing by the European Central Bank first sent the Stoxx Europe 600 Index to its best start of the year since 1998, before concern over Greece leaving the currency union dragged the gauge to its worst quarter in three years. Shares then rebounded when the Mediterranean nation reached a deal with creditors, before giving up half those gains amid fears China?s slowdown is deepening.
The Stoxx 600 climbed 0.8 percent at 9:41 a.m. in London.