Luxembourg Stock Exchange Maintains Growth In Difficult Environment

by Phillip Morton, Investors Offshore.com

06 January 2009

Despite a turbulent year for the world's financial markets, the Luxembourg Stock Exchange maintained strong growth in its listing activity, with a total of 11,651 new securities being admitted to the official list last year, the bourse has announced.

The main segments of newly listed securities were fixed income (7,318 units) investment funds (1,535 units) and warrants (2,771 units).

As at December 31, 2008, the Luxembourg Stock Exchange held 49,097 quotation lines against 45,573 in 2007. This represents a net growth after delistings of 7.73% for the year, and is viewed by the exchange as a "significant increase in view of the current difficult environment." The main growth segments, were fixed income (+1,464 units), warrants (+1,301 units), and investment funds (+761 units).

On the two markets that it operates (the main European Union regulated market and the Euro MTF market), 43,876 securities were listed on the regulated market and 5,221 were listed on the Euro MTF market. The largest segments were fixed income, with 32,933 lines, and investment funds, with 8,133 lines.

"This growth is evidence of the attractiveness of the Luxembourg financial centre for admissions to trading of international securities," the exchange said in its 2008 performance review, adding:

"Despite a noticeable slowing down of listing activities from October 2008, the Luxembourg Stock Exchange retains its leading position in terms of the number of domestic and international bonds listed by a European exchange. On an international level, the exchange is the leading European listing centre for Global Depositary Receipts."

During the year, the LuxX index declined by 59.45%. The index was particularly affected by the ongoing financial crisis due to the preponderance of banks and financial companies making up the index. Eight out of the nine constituent companies in the index, of which five are banks or financial companies, finished the year with negative performance.

The highest level of the LuxX was on January 2, 2008 at 2402.16 points. The lowest level was reached on November 21 at 905.52 points.

Important new listings in the share and fixed income segments took place in 2008. On December 4, 2008, the Luxembourg Stock Exchange commenced secondary trading of a bond issue of the Grand Duchy of Luxembourg for an amount of EUR2bn. This issue is the largest amount ever issued by the Luxembourg state and follows the successful primary offer period that was mainly addressed to retail investors and carried out between November 10 and November 20, 2008. This was the first Luxembourg sovereign bond issued to investors in 16 years.

In the share segment, the shares of Reinet Investments S.C.A., a Luxembourg-registered company, were admitted to trading on October 21, 2008. On the first day of trading, a record number of trades were recorded on the NSC trading platform operated by the Luxembourg Stock Exchange.

Also in the share segment, the first SICAR (Société d’investissement en capital à risque ) was listed. This took place on the Euro MTF market on October 9, 2008. SICARs are vehicles that are dedicated to investments in venture capital and private equity whose securities are targeted at experienced investors.

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