- Exchange trading to bring highest transparency and security standards to government bond trading
- Better fungibility of government bonds to particularly benefit private investors
- Fixed quotes of market makers improve liquidity and price quality in bond trading
(Vienna) Starting today, the Vienna Stock Exchange enlarges bond trading with electronic continuous trading that will include all 21 Austrian fixed-interest government bonds and one bond with variable interest issued by the Republic of Austria. Up to now, trading in government bonds took place in a one-time intraday auction. In the future, trading members and investors on the Vienna Stock Exchange will benefit from a more transparent and liquid market for Austrian government bonds.
“Presently, most government bonds and corporate bonds are traded over the counter - this means manual trading and a lack of transparency for trading members and investors. With the introduction of continuous trading and market making, trading in government bonds on the exchange now stands for the highest possible level of transparency and security,” stressed Birgit Kuras, member of the Management Board of Wiener Börse AG.
Austrian government bonds enjoy international recognition among investors
In a first step, continuous trading will be enlarged by 22 selected bonds issued by the Republic of Austria with a total outstanding volume of EUR 189.6 billion. These government bonds will be maturing in a time span ranging from one to 46 years. The of the bonds and instrument details such as interest rate, price, yields and issuing volume are available on the .
"As a benchmark issuer, the Republic of Austria supports all initiatives that enhance market transparency. The introduction of continuous trading for Austrian government bonds is a significant improvement in tradability, especially for retail investors," said Markus Stix, managing director of the Austrian Treasury, which issues Austrian government bonds in the name and for the account of the sovereign.
Ongoing display of exchange trading
Trading members, data vendors and interested private investors can obtain an ongoing view of trading and current prices via the market datafeed and website of the Vienna Stock Exchange. The best buy and sell orders are displayed to the public in the profiles of the securities. At the end of trading day, a valuation is published that serves as a reference price – even if no trades were executed. The clearing and settlement of trades is done by Central Counterparty Austria - CCP.A. The collateral requirements and the sophisticated risk management system for exchange trading significantly lowers the risk exposure for trading members compared to OTC trading.
Binding buy and sell quotes enable fluid trading throughout the trading day
Trading hours run from 9:00 a.m. to 5:30 p.m. Exchange orders, which queued up for execution, can be executed more quickly now thanks to the liquidity providers. Market makers guarantee continuous trading securities. While on German exchanges the quotes entered are not binding, market makers on the Vienna Stock Exchange help to create additional liquidity and better quality prices by entering binding buy and sell orders. The first two market makers for the government bonds are the German brokers Walter Ludwig Wertpapierhandelsbank GmbH and Baader Bank AG. The multi-market-making system of the Vienna Stock Exchange is based on competition. All trading members of the Vienna Stock Exchange have the possibility of assuming the role of liquidity provider. Same as in stock trading, the Vienna Stock Exchange continuously monitors the activities of the market makers.
About the Vienna Stock Exchange
The Vienna Stock Exchange is a 100% subsidiary of the CEE Stock Exchange Group (CEESEG) which includes the stock exchanges of Budapest, Ljubljana and Prague. The CEE Stock Exchange Group is the largest stock exchange group in the region. In addition to the four stock exchanges, CEESEG operates three commodity exchanges and holds stakes in five clearing systems (CCPs) and two central securities depositories (CSDs). CEESEG makes access and trading on the local markets easier with the aim of improving liquidity. The CEESEG stock exchanges cooperate with 12 exchanges in Central and Eastern Europe and are globally recognized for their unique CEE know-how.