Dear shareholders,
As Chairman of the Board of Bolsas y Mercados Españoles
(BME), I am pleased to present our Management Report
and Consolidated Financial Statements.
An exceptionally challenging 2012
2012 was the fifth year of the world economic crisis, a
period during which significant damage was inflicted
with dramatic consequences for economies around the
globe. It has been a challenging period, involving a wide
range of crises and a squeeze on credit that lingers on.
The reforms enacted by the Government, combined
with Europe’s unanimous stance in favour of the Euro
and the roll-out of a number of economic measures,
helped stabilise the markets somewhat. In the case of
Spain’s sovereign debt and the Spanish stock market,
the messages of the European Central Bank’s President
have undoubtedly led to inflection.
The Spanish stock market ended 2012 down 5%.
The risk premium remained a drag on the economy,
although it fell from the high it had reached.
Over the past five years, Spanish listed companies have
shed €400 billion of their market value. Spain’s country
risk has weighed heavily on listed companies, even
though many are international leaders in their sectors.
One of every four companies listed on the Spanish
stock market generate 75% of their turnover abroad.
Results are satisfactory despite the backdrop
The company’s results can be considered satisfactory
despite the challenging backdrop. BME’s net profit in
2012 stood at 135.5 million euros, 12.7% less than in 2011.
Full-year revenue amounted to 296.2 million euros, down
7.8% year-on-year.
Operating costs in 2012 advanced by just 0.6% compared
with 2011 to 98.9 million euros. This is significantly lower
than the annual inflation rate.
A decline in trading volumes
Prevailing uncertainty has also impacted trading
volumes. Trades on the Spanish stock market fell by
11% in 2012 while cash trading declined by 24.5%. This
drop was partly due to the ban on short selling, which
was limited to financial stocks between January and
February and extended to the entire market from July
to February 2013.
The ban on short selling of all listed stocks also contrib-
uted to the decline in the volume of equity securities and
derivatives traded, leading to a decrease in order-book
liquidity, and a knock-on effect of greater bid-ask spreads
and higher implicit transaction costs for investors.
The slump in trading on the Spanish stock market was
mirrored across the board. Turnover also dropped last
year by 24% on the German stock market, 21% on the
Euronext index and 25%on the NewYork stock exchange.
Interest in private Fixed-Income securities was unwa-
vering during 2012, with over 2.6 trillion trades. The
SEND platform for trading issues performed outstand-
ingly, growing ten-fold in 2012, both in terms of turn-
over and the number of trades performed.
A total of 67.2 million trades were completed on the
Futures and Options market, practically unchanged
year-on-year. The growth in index-linked options was
particularly pronounced, standing at 91%.
Letter from the Chairman
Report 2012
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