The Coronavirus mazazo has been double for small investors. In addition to having suffered the strong setback of the market, they have had to endure that almost half of the operations of the last months on Spanish shares to remain out of reach. The volume registered in markets other than the official one, to which they usually do not have access, has set record highs.
The data is provided by the National Securities Market Commission (CNMV) in its analysis bulletin for the first quarter of the year, the lowest in history for the Spanish stock market. Specifically, nothing less than 47.8% of the volumes mobilized in operations on Spanish stocks occurred in unofficial markets and trading venues, far from the reach of retailers.
The emergence of volatility is the argument that the institution aims to explain that “the market share of the latter has continued growing to a new record high” The official regulated markets operated by BME have had to comply with a 52.1% share.
Rise, but not enough
And all this despite the fact that price fluctuations and investment panic increased registered volumes by 19.4% in the official market. A rebound that, however, fell short to offset the acceleration of the platforms where the most voluminous operations are traded and which international and institutional investors most frequently resort to.
The added burden that small investors have had to contend with in recent months is most evident in whole numbers. If during the first quarter of year lThe official markets mobilized crosses for 126,698 million eurosOutside of it, operations on Spanish shares were closed for 117,730 million, as reflected by the figures provided by the CNMV.
A ‘false’ ceiling
The penalty here it is not in the lack of liquidity, nor in the formation of prices, circumstances in which the small investor has not suffered any decrease. It is in the influence that these operations held out of their reach have on the market in which they operate with modest volumes.
Although the CNMV itself recently pointed out that the rebound in the unofficial markets “could have reached a ceiling” At the end of last year, the emergence of the coronavirus and the panic unleashed in the markets have therefore ruined this forecast. So much so that the supervisor explains that contracting in these markets vetoed to the bulk of retailers “has advanced at a much more intense rate.”
The profit of these markets with respect to the closing of the last exercise is of 7.5 percentage points. An increase that the institution chaired by Sebastián Albella does not hesitate to attribute, among other factors, to the “increase in algorithmic and high frequency trading, which is usually carried out to a greater extent in these competing centers ”.
Within this scenario, the unofficial market that has captured the most volume over Spanish shares has been the Chichago Stock Exchange (Cboe, for its acronym in English). With a volume of 85,000 million euros, it accounts for 72% of the total share outside the markets operated by BME. An amount and a share that it achieves thanks to its two platforms for trading European shares: BATS and Chi-X.
Shorts and algorithms
In the opposite direction, the supervisor indicates that “Turquoise and the rest of the operators lost market share among BME’s competing centers again”. The platform owned by the governing company of the London Stock Exchange (LSE) has had to settle for 6.8% of the share outside the official market.
The CNMV’s review of this situation also has words for the veto on short positions that it established for a month on March 17. The institution indicates that “the purchases to close short positions after the establishment of the prohibition “they also contributed to trigger the hiring on the Spanish securities at a time when” the selling pressure registered as a result of the fall in prices “put the singing voice.
However, there is also a light here at the end of the tunnel. The most recent financial stability note published by the CNMV indicates that “preliminary April data shows partial reversal of this trend as volatility has moderated again. ” In just under a month it will be confirmed whether this time the leakage ceiling of volumes available to retailers had consistency.