The Bolsa de Madrid has combined with the country’s three regional exchanges, its financial futures, options and debt markets and the Iberclear clearing system to form the Bolsas y Mercados Españoles. With pro forma trading volume of E3 trillion ($2.7 trillion) a year in stocks and bonds, the Madrid-based Bolsas y Mercados ranks behind only Euronext, Deutsche Börse and the London Stock Exchange. An IPO is in the works.
The market’s sheer volume and the public offering should make Spain a “very relevant factor” in pan-European stock market consolidation, contends Antonio Zoido, chairman and CEO of the Bolsas y Mercados. But the 57-year-old market veteran cautions that the more utopian visions of a pan-European exchange are quixotic. The failure of electronic exchanges like Jiway and Tradepoint, he says, shows just how difficult it is to shift liquidity from existing markets. Thus, Zoido says, “basic assumptions used to justify consolidation moves should be given a second thought.”
Furthermore, Zoido doesn’t think Spain needs a pan-European bourse right now. “We are in a very comfortable situation,” he explains. “We don’t feel our liquidity threatened. We are growing continuously.” Volume has tripled since 1996.
Consolidation should focus mainly on providing better service to users, Zoido believes. He cites Euronext’s purchase of Liffe, which retains the London exchange’s successful electronic platform, as a model: Not only does Liffe work, but Euronext isn’t trying to fold the exchange into its Paris empire. This doesn’t necessarily mean that the Spanish bolsa boss favors Euronext as a future partner: Zoido is holding very exploratory talks with all the European markets.
