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London Stock Exchange Group to partially move to Milan

This decision is dictated by the UK out of the EU

The operator of the London stock exchange (LSE), London Stock Exchange Group (LSEG), is considering the partial transfer of the bonds trading in Milan in anticipation of a British exit from the EU (Brexit).

As reported “Interfax”, now the transactions with government bonds are owned by LSEG platform MTS Cash, their volume in all countries of operation is $13.4 billion per day. After Brexit in March 2019, about 20% of the business will move from London to Milan.

MTS Cash plays an important role in the interaction between sovereign issuers and investment banks, including helping to determine the price placement. System appeared in Milan, it was a joint venture of the Ministry of Finance and the Central Bank of Italy. However, the return to Milan is not only the history of the system, but also with the fact that Italy now has the largest market of government bonds in the Eurozone.

Since the beginning of March only the UK government and British banks will use the London division of the MTS Cash platform owned by LSEG. For all the other countries of Europe access MTS Cash will be provided through the area in Milan.

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Part of the European Union, for example, France, are issuing and selling new bonds to investors through domestic banks and local platforms. However, for more than a dozen countries, including Austria, the Czech Republic, Ireland, the Netherlands, Portugal, MTS in London – the main channel for reaching large investors such as asset managers. In addition to the European sovereign issuers, the transfer will also affect the primary trading Israeli government bonds.

In addition, MTS plans to move from London to Italy and trade with Euro-zone bonds on the secondary market, although the British division of MTS BondVision will continue to work.

According to PWC estimations, peak razmeshenie Ukrainian companies on the LSE came in 2007. The last major offering was in 2013. Among Ukrainian business giants, which were placed on the London stock exchange, include:

  • Ferrexpo (metals and mining);
  • Continental Farmers Group (agriculture);
  • MHP (agriculture);
  • KDD Group (real estate);
  • Astarta (agriculture);
  • Ukrproduct Group (food industry).

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