Exchange turnover in both investment and leverage products on Europe's financial markets were down at the end of June 2018, according to the European Structured Investment Products Association (Eusipa). European exchange turnover fell by 21% to €25.8bn from the first quarter of 2018 and 5% year on year, primarily due to developments in the German and Swedish markets.

Second-quarter turnover in investment products traded on European exchanges amounted to €10.2bn, which represents 39.5% of total turnover. Exchange turnover was down by 24% on the previous quarter and 20% year on year.

In the period from April to June, turnover in the leverage products segment including warrants, knock-out warrants, factor certificates etc., amounted to €15.6bn, 60.5% of total turnover. While exchange turnover decreased by 18% on the first quarter of 2018, it was up 7% year on year.

From an issuance perspective, trading venues located in Eusipa member countries listed 521,228 investment products and 1,217,527 leverage products in the first half of the year. The number of listed products on offer across European exchanges was up by 10% year on year.

Banks issued 1,125,926 new investment and leverage products in the second quarter of 2018, a decline of 2% quarter on quarter, but a significant 29% year-on-year increase. In total, 159,881 new investment products were launched, accounting for 14.2% of all new issues. The number of new leverage products listed in the second quarter stood at 966,045 at the end of June, representing 85.8% of new issues.

At the end of the second quarter of 2018, in Austria, Belgium, Germany and Switzerland, the market volume of investment and leverage products recognised as securities stood at €250.3bn - up 5% on the figure recorded for the previous quarter and down 4% on the same quarter last year.

At the end of June the market volume of investment products totalled €243.4bn - up 6% on the previous quarter and 9% year on year. The outstanding volume of leverage products stood at €6.9bn at the end of June, a fall of 18% on the volume reported for the first quarter of 2018 and a drop of 81% year on year.

Additionally, the UK Structured Products Association (UK SPA) reported that pricing for swap options insuring against bank bond defaults 'generally declined over the last month with some banks notching up big declines - UBS and Societe Generale in particular saw some very noticeable declines in their swap pricing, along with Credit Suisse. Concerns about risks at German banks also ebbed this month with one-year credit default swap (CDS) rates for Deutsche Bank in particular falling sharply'.

Some banks experienced a sharp increase in CDS pricing, notably Investec, which saw a sharp increase in its options prices.

SRP data shows that more than 795,000 products including tranche, non-retail, leverage and flow, were brought to market in Europe during the first half of 2018 with an estimated volume of €45.8bn. Vontobel with over €9.4bn sold and 20% market share leads the bond provider tables by far, with a number of other banks in tight competition for the second spot. The Swiss bank also leads the distributors ranking with a 21% market share. BNP Paribas and Credit Agricole complete the top three distributors table with a market share of 8% and 6%, respectively.

The members of Eusipa, who provide the figures for the market report, include: Zertifikate Forum Austria (ZFA), Belgian Structured Investment Products Association (Belsipa), Association Française des Produits Dérivés de Bourse (Afpdb), Deutscher Derivate Verband (DDV), Associazione Italiana Certificati E Prodotti Di Investimento (Acepi), Swedish Exchange Traded Investment Products Association (Setipa), Swiss Structured Products Association (SSPA), and The Netherlands Structured Investment Products Association (Nedsipa).

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