Virt-x says it is on track, despite speculation about failure

Virt-x has said it is on course to achieve its goals Keystone Archive

The first pan-European stock exchange market, virt-x, in London has told swissinfo that reports that it has failed in its mission are unfounded.

The company, an Anglo-Swiss venture, was reacting to increasing speculation that after only seven months in operation, it is already a candidate for a takeover.

According to unverified reports, the London Stock Exchange is the most likely candidate to take it on board.

Virt-x, on which Swiss blue chips, the leading Swiss companies, are traded in London, came into operation on June 25 last year. The Swiss Stock Exchange and a consortium of major banks, including UBS and Credit Suisse, own about 80 per cent of the virt-x stock.

Ambitious goals

“Virt-x is committed to obtain 10 per cent of pan- European blue chip trading within a year and with eight per cent of the market we believe we’re on track to achieve this goal,” a virt-x spokesman told swissinfo.

Virt-x hopes to build up pan European market share by undercutting other exchanges with cheaper fees for trading, clearing and settlement.

In a statement on Friday, the Credit Suisse Group said that it “fully supported” the virt-x concept.

Virt-x has confirmed itself as a “robust platform” which allows us to trade pan European blue chips at one stock exchange in different currencies, a statement said.

It added that it was now a question of increasing liquidity on the stock exchange over the coming months.

Unfulfilled promise

Credit Suisse said in December in a research paper that although virt-x may be a technology leader, it has so far not lived up to its promise of becoming a truly cross-border stock market.

“The example of virt-x shows how difficult it is to attract trading volumes from another exchange. Its share of turnover in foreign shares with the largest capitalisation is marginal compared with the home market,” the CS paper said.

It noted that the bulk of the eight per cent market share comes from trading in Swiss blue chips, with volume in non-Swiss blue chips negligible.

However, Credit Suisse commented that it was too early to pass judgement on the virt-x project. Other projects in the past had experienced “dry” periods of up to one year, it noted.

Consolidation prospects

It added that the consolidation of the European stock exchange landscape was inevitable – a trend not denied by the authorities at virt-x when asked about a possible takeover.

“It’s company policy not to comment on market speculation. However, we have said many times that we’re open to consolidation of European changes,” the virt-x spokesman told swissinfo.

The Swiss chief executive of virt-x, Antoinette Hunziker-Ebneter, has been unperturbed by the exchange’s slow start and is convinced that cheap trading costs will help virt-x reach its goals.

“It takes time for market participants to realise the advantages of shifting to virt-x,” she said in an interview.

swissinfo with agencies