Euronext today announced the launch of the Euronext® Southern European Banks Index NR (SEBI), an index reflecting the banking sector of Southern Europe. The index will serve as the underlying for new index futures which will be available for trading on Euronext Amsterdam as of 2nd October, followed by the launch of index options on 9th October. Euronext is the first exchange to provide investors with the opportunity to trade derivatives on an index based on the banking sector across Southern Europe.
With the new products Euronext is responding to recent market demand following volatility in this region. The Euronext Southern European Banks Index NR (Net Return) is initially composed of 20 stocks from Spain, Portugal, Italy and France from the financial sector (excluding insurance companies). Over recent years volatility in this sector has been high due to economic factors, and is expected to continue through 2014 as banks develop their business models ahead of the European Central Bank’s stress test in October/November.
The index is composed of financial companies with a market capitalisation between EUR 1 billion and EUR 25 billion. Three variants will be launched, besides the mentioned Net Return, a Price Return and a Gross Return variant will be published. For a complete overview of the constituents, see attached document.¹
Adam Rose, Head of Financial Derivatives at Euronext, said: “It is a great pleasure to announce these new products today, as part of our strategy to grow our derivatives business. This index is the first to track institutions at the heart of the financial industry in Southern Europe, providing investors the opportunity to hedge or trade equity movements in this sector. This initiative illustrates our efforts and commitment to work closely with our clients and members in order to quickly respond to the market’s needs.”
The new index futures (ticker symbol: FSB) will expire on the third Friday of the contract month, and are initially offered with three, six and nine month maturities. The new, European-style index options (ticker symbol: OSB) will expire on the third Friday of the contract month and will have maturities up to nine months.
The index is an addition to Euronext’ broad range of indices that are managed and calculated by Euronext, which totals 430 indices (third-party indices included). Index derivatives have proven to be very popular. Of the total turnover in derivatives products on Euronext’s markets, 44% accounts for index options and futures². The new SEBI index futures and options will further grow Euronext’s existing derivatives offering, and build on this year’s launch of an enhanced stock futures franchise and the launch of Spotlight options. In total, Euronext now offers almost 500 product classes in derivatives.