Hamish McArthur’s Post

Name: Paul Squires on European IPOs and the close | Hamish McArthur posted on the topic | LinkedIn
Uploaded: 2024-05-07T08:03:58.841Z
Duration: 8 min 47 s
Channel: Hamish McArthur

Hamish McArthur

Co-Founder and Executive Producer at Trader TV

7mo

New Trader TV This Week - Hopes of ‘turning point’ in European equities and navigating rising concentration at the close Paul Squires, head of trading for EMEA and APAC at Invesco EMEA, discusses the main events that could influence trading activity this week and provides his take on the liquidity conditions across European #equities. In this episode, he looks at: 🌍 The “dearth” of European #IPOs yet with some positive signs emerging 📈 Reasons behind the growing concentration of #trading activity at the close 💧 Thecimpact of this concentrated event on intraday #liquidity 🕰 His take on the debate around shortening trading hours in Europe In the extended show, only available to our audience that signs up to Trader TV’s mailing list, Squires also covers more on the trading hours debate and whether he thinks we’ll ever see the institutional space move to 24/7 trading. If you didn’t sign up for Trader TV’s newsletters and wish to access the full interview, reach out to [email protected]. Check it out! The show also includes rates data from MTS Markets. #trading #capitalmarkets #equities #liquidity #theclose #IPOs

1 Comment

Transcript

Welcome to Twitter TV. This week you're insight into Trading Desk can prepare for the week ahead. I'm Joel Gallagher. Today I'm joined by Paul Squires at Invesco to discuss the main topics and events leading this week. Paul, welcome to the show. Thanks Jay. Now we're in the first boat week of May. Is it a case where it's you know selling may go away or how would you be advising train desk to approach this week? We certainly expect things to quieten down this week. It's a relatively light schedule UK GDP on Friday and we get the Bank of England rate decision on Wednesday. So those are perhaps the two biggest economic events this week and there are still some earnings to come out. BP, British Aerospace, Glaxo, still some things to watch for. Tool. I think in terms of you know, market levels or whether this is the right time to sell, I think you could probably make a case either way. So equities are performed pretty well. They had a good Q1 particularly considering the volatility of the rate cut expectations and what happened to bond yields etcetera in Q1. So against that there's a strong case for equities particularly because I think you know the last couple of weeks some of that steam has come out of the market a little bit and that's often a good healthy kind of correction. Just consolidation to then move higher again and certainly in terms of positioning, I think that's the way you know most of the sort of CTA's are seeing it. There's still a heavy skew towards being long equities and short treasuries for example, but bonds more generally. So I would say it feels, you know it feels pretty stable. We think there might be sort of pockets of the market that are better positioned to continue to perform well. For example mid and small caps have underperformed. For some time, as interest rates have been high and those mid and small caps often have high levels of debt, just in the last month or so, we've started to see that recovery by them and that could be a pattern that continues. So I think there's reasons to be positive. We also had Afme's primary market and trading report out last week and it showed us the European liquidity picture. It also showed some positive signs of pickup in terms of the IPO market. What is your view in terms of the trading conditions across Europe right now? And are we starting to see a turning point in the IPO market? Look, I mean, I think the death of ECM across UK and Europe is well documented, ��170 billion. It has been lost from the value of listed Pan European companies in the last year and that represents 1 1/2% of total market cap. So definitely a turning point would be welcome, but there are some positive signs. You know within that same time period there was roughly ��110 billion of issuance. So it's not that there is none at all, there is some. And I think looking ahead, there are definitely a few IPO's in the pipeline and we're starting to see as well much more heavyweight European M&A or back into the spotlight. You know, we've had BHP's bid for Anglos and whether that triggers a you know, kind of takeover competition. We've had BB VA last week saying that they're looking at Sabadell and there are smaller deals going on fairly regularly. So that kind of sparks a spotlight on UK and European. See, Mark, It's nothing that's really helpful. I think the thing that perhaps just completes that sort of rejuvenation is having a more stable macro background, which we clearly haven't had for some time. You know, as it becomes a more accepted narrative that interest rates are going to stay where they currently are, that could start to spur more corporate activity. One of the hot topics we're discussing is the clothes. Tell us why do you think there's a growing concentration of activity taking place around the clothes and is it having a concerning impact on intraday liquidity? We see closed market share at somewhere between 20 and 25%. If you compare that with the amount of business that is done around the open of the market, which is actually less than 1%. The first thing you're going to conclude is there's a very uneven distribution of trading activity through the course of a European market session. What you generally get is this kind of self perpetuating clustering of activity, and that's actually a helpful thing. In terms of liquidity, first of all, we start off with index funds who have to trade at the close. Secondly, you get the perspective of people trading outsized orders, So institutional orders, they're going to be many multiple times. Normal market size. So it's really around finding liquidity and the more that that closing liquidity comes through, the more the trader is going to be looking at that as an opportunity to execute a large proportion of their apparent order. And then I think the third factor that comes into it is the growth of low touch or automated trading. And within that for example, although we use many different strategies, what is a common strategy is a volume weighted average price. Algorithm and by definition the fact that it's volume weighted means that it's gonna point itself towards doing more activity towards the close as well having looked at the historical volume distribution. So we put all of that together, you're going to get this sort of confluence of trading patterns, you know, is that something to be concerned about? I don't think so. I think there's always opportunities through the rest of the day. That's one thing and of course one of the considerations when you're trading orders is market exposure. So it's not just a question of. Well, I've got this order at 8:30 in the morning, but I'm going to wait until 4:30 to trade it. You just can't take that market risk. So I think traders will always be looking for opportunities throughout the day, but without any specific skew to that, there's going to be a sort of default of a certain amount of that business happening towards the close. We have ETF business now. We have index funds, we have quant funds and we have fundamental funds as well. It's a relevant consideration for all of those. Types of activities. Another topic that was widely discussed at Trade Tech was trading errors. Tell us what are your thoughts on having shorter trading hours in here. I think the debate has taken on different forms pre and post the pandemic. So I think pre the pandemic it was more a debate around. Just global markets becoming more synchronised and on that basis, you know, the Japanese market is open for five hours, the US market is open for 6 1/2 hours. No one can quite work out why UK and European markets are open for 8 1/2 hours. So I think that was kind of an original way of just asking that question Might you know, the pandemic played its part in people becoming more aware of consequences of sitting in front of your screen for 8 1/2 hours, well more than eight and half hours a day, but at least eight and half hours of market being open and also working from home. People became much more aware of factors that contributed positively or negatively to well-being. And traders aren't immune from that, right. So it did become an important and healthy and constructive part of the discussion. And then I think the third part of it is often around the retail market. We just don't have that size of retail market in the US has. I wouldn't say that we are desperately shouting from the rooftops to have reduced hours, but I can absolutely see if it helps concentration of liquidity, very sensible business case for doing that. I think after me for example representing the cell side, I think the IA. Representing the buyer side would be in agreement seeing benefits from reducing market hours. I think the barriers being quite candid are the exchanges who you know are not in favour of that because they would argue that every trade that gets done on their exchange is more revenue for them. I guess they're sort of fairly crude way of looking at it is you reduce the market hours, you're reducing our revenues are variable costs for example, perhaps aren't very significant. The fixed costs are much more significant, so we're not really in favour of it. I think that would be the summary to be honest. Thank you Paul for your insight and thank you for watching to catch your extended show sign up to remaining less attritiontv.net/subscribe.

Trader TV

7mo

And we are back after the #bankholiday - thank you to Paul Squires at Invesco EMEA.

1 Reaction

To view or add a comment, sign in

More Relevant Posts

Trader TV

3,798 followers
7mo
Report this post
New Trader TV This Week - Hopes of a ‘turning point’ in European equities and navigating the rising concentration at the close. Paul Squires, head of trading for EMEA and APAC at Invesco Ltd., discusses the main events that could influence trading activity this week and provides his take on the liquidity conditions across European equities. In this episode, he also looks at: 🌍 The “dearth” of European IPOs yet some positive signs are emerging 📈 Reasons behind the growing concentration of trading at the close 💧 The impact of this concentrated event on intraday liquidity 🕰 His take on the debate around shortening trading hours in Europe In the extended show, only available to our audience that signs up to Trader TV’s mailing list, Squires also covers more on the trading hours debate and whether he thinks we’ll ever see the institutional space move to 24/7 trading. If you didn’t sign up for Trader TV’s newsletters and wish to access the full interview, reach out to [email protected]. Check it out! The show also includes rates data from MTS Markets. #trading #capitalmarkets #equities #liquidity #theclose #IPOs

4 Comments
Like Comment
To view or add a comment, sign in
Josephine Gallagher

TV Presenter and Producer
7mo
Report this post
New Trader TV This Week - Hopes of a ‘turning point’ in European equities and navigating the rising concentration at the close. Paul Squires, head of trading for EMEA and APAC at Invesco Ltd., discusses the main events that could influence trading activity this week and provides his take on the liquidity conditions across European equities. In this episode, he also looks at: 🌍 The “dearth” of European IPOs yet some positive signs are emerging 📈 Reasons behind the growing concentration of trading at the close 💧 The impact of this concentrated event on intraday liquidity 🕰 His take on the debate around shortening trading hours in Europe In the extended show, only available to our audience that signs up to Trader TV’s mailing list, Squires also covers more on the trading hours debate and whether he thinks we’ll ever see the institutional space move to 24/7 trading. If you didn’t sign up for Trader TV’s newsletters and wish to access the full interview, reach out to [email protected]. Check it out! The show also includes rates data from MTS Markets. #trading #capitalmarkets #equities #liquidity #theclose #IPOs

4 Comments
Like Comment
To view or add a comment, sign in
Dan Barnes

CEO and Co-Founder
7mo
Report this post
New Trader TV This Week - Paul Squires, head of trading for EMEA and APAC at Invesco Ltd., discusses events that could influence trading activity this week and his take on liquidity conditions across European equities. 🌍 The “dearth” of European IPOs yet with some positive signs emerging 📈 Reasons behind the growing concentration of trading activity at the close 💧 The impact of this concentrated event on intraday liquidity 🕰 His take on the debate around shortening trading hours in Europe In the extended show, only available to our audience that signs up to Trader TV’s mailing list, Squires also covers more on the trading hours debate and whether he thinks we’ll ever see the institutional space move to 24/7 trading. If you didn’t sign up for Trader TV’s newsletters and wish to access the full interview, reach out to [email protected]. Check it out! The show also includes rates data from MTS Markets. #trading #capitalmarkets #equities #liquidity #theclose #IPOs

3 Comments
Like Comment
To view or add a comment, sign in
Josephine Gallagher

TV Presenter and Producer
1mo
Report this post
New Trader TV This Week - James Grant, CFA, head of execution trading and portfolio management, at BANOR CAPITAL, discusses how trading desks are in store for a big week of earnings and with the UK budget. He also delves into structural issues impacting the UK and European equities markets and how his trading desk both navigates these challenges and finds opportunities. In this episode: 📜 Prepping for a big week for earnings and the UK budget 📈 Unpacking large Vs small cap firms and valuations 🌍 Dissecting the structural issues across the UK and European markets 💧 Navigating Europe’s liquidity issues 🔅 What are the long-term solutions to the problems in Europe? You can find the extended show by signing up for our Trader TV mailing list and by visiting Tradertv.net. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #equities #liquidity

2 Comments
Like Comment
To view or add a comment, sign in
Hamish McArthur

Co-Founder and Executive Producer at Trader TV
1mo
Report this post
New Trader Trader TV This Week - James Grant, CFA, head of execution trading and portfolio management, at BANOR CAPITAL, discusses how trading desks are in store for a big week of earnings and with the UK budget. He also delves into structural issues impacting the UK and European equities markets and how his trading desk both navigates these challenges and finds opportunities. In this episode: 📜 Prepping for a big week for earnings and the UK budget 📈 Unpacking large Vs small cap firms and valuations 🌍 Dissecting the structural issues across the UK and European markets 💧 Navigating Europe’s liquidity issues and finding opportunities 🔅 What are the long-term solutions to the problems in Europe? You can find the extended show by signing up for our Trader TV mailing list and by visiting Tradertv.net. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #equities #liquidity

2 Comments
Like Comment
To view or add a comment, sign in
Trader TV

3,798 followers
1mo
Report this post
New Trader TV This Week - James Grant, CFA, head of execution trading and portfolio management, at BANOR CAPITAL, discusses how trading desks are in store for a big week of earnings and with the UK budget. He also delves into structural issues impacting the UK and European equities markets and how his trading desk both navigates these challenges and finds opportunities. In this episode: 📜 Prepping for a big week for earnings and the UK budget 📈 Unpacking large Vs small cap firms and valuations 🌍 Dissecting the structural issues across the UK and European markets 💧 Navigating Europe’s liquidity issues and finding opportunities 🔅 What are the long-term solutions to the problems in Europe? You can find the extended show by signing up for our Trader TV mailing list and by visiting Tradertv.net. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #equities #liquidity

3 Comments
Like Comment
To view or add a comment, sign in
Dan Barnes

CEO and Co-Founder
7mo
Report this post
New Trader TV This Week - European market in need of “rewiring” says CIO Alexander Morris at F/m Investments, LLC unpacks the growing concerns across European markets and says the region requires a fundamental “rewiring” which could take years to resolve. In this episode, he looks at: 📊 An “exciting” upcoming week and potential inflation surprises ⚠ The revival of confidence in global equities and risk-on strategies 🌍 The growing divergence between the EU and US markets 📑 Managing concentration risk during earnings 📉 His views on why there is low volatility despite market uncertainty In the extended show, available to our audience that signs up to Trader TV’s mailing, Morris also covers the increase in company buybacks and how trading desks should be scrutinizing this activity. If you didn’t sign up for Trader TV’s newsletters and wish to access the full interview, reach out to [email protected]. The show also includes rates data from MTS Markets. #trading #capitalmarkets # #equities #IPOs #EU #US

3 Comments
Like Comment
To view or add a comment, sign in
Josephine Gallagher

TV Presenter and Producer
2mo
Report this post
New Trader TV This Week - Sarah Harrison, senior portfolio manager at @Allspring Global Investments, discusses how she’s seeing a pickup in high-yield issuance and new money deals, and looks at how markets are reacting. Additionally, she unpacks her investment forecast for fixed income and dissects warning signals in European default rates. In this episode: 📜 A pick-up in issuance and new money deals – market reaction 📈 Important signals to react to pay attention to this week ⚠ Is the maturity wall still a cause for concern? 💰 Dissecting US Vs. European corporate refinancing 🚨 Warning signals from EU default rates & finding opportunities 💸 Extended show: Forecast for activity around earnings and buybacks You can find the extended show by signing up to our Trader TV mailing list and by visiting Tradertv.net. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #fixedincome #newissues #issuance #marketliquidity #defaultrates

3 Comments
Like Comment
To view or add a comment, sign in
Josephine Gallagher

TV Presenter and Producer
1w
Report this post
New Trader TV - Ben Ashby, chief investment officer at Henderson Rowe, tells Trader TV that it’s time for buy-side desks to take chips off the table ahead wrapping up their 2024 positions as markets are vastly underestimating the impact of risks—including the deteriorating political conditions in Europe, growing deficits, and the struggling Chinese economy. The CIO also unpacks year-end liquidity, market mispricing, and potential trading opportunities to look out for in 2025. In this episode: 🌍 Dislocation between global markets and political chaos in Europe 🏷️ Why FI markets are "mispriced" 💦 A look at end-of-year liquidity ⚠️ Biggest risks of 2024 – 2025 📈 Where to look for opportunities between now and the new year Find the full show on tradertv.net as well. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #fixedincome #equities #liquidity #Europe #risks

5 Comments
Like Comment
To view or add a comment, sign in
Hamish McArthur

Co-Founder and Executive Producer at Trader TV
1mo
Report this post
#NEW Trader TV This Week: Lindsey Spink, head of global #fixedincome #trading at American Century Investments, talks through the big trades institutional #traders are placing in the market post-US election, current market conditions and the risks - where they exist for #buyside #trading desks. With very different levels of volatility in spread and macro products, 'tape bombs' or unexpected market events, look unlikely in the short term, but primary markets will see increasing pressure. In this episode: 📉 Very different market conditions in spread and macro products ⏰ Why election was a risk clearing event 🚨 Pressure growing on primary as issuance falls 🗓 The key tech investments for traders today Find the full show on tradertv.net directly. This show is supported by Cabrera Capital Markets and MTS Markets. #trading #buyside #fixedincome #riskon

1 Comment
Like Comment
To view or add a comment, sign in

4,007 followers

3000+ Posts

View Profile Connect

Hamish McArthur’s Post

Transcript

More Relevant Posts

Explore topics