Traders Can Play Spain Recovery With All-New, All-Bank Index

Updated on

Investors making bets on Spain’s bank stocks will as of today have a new route.

The nation’s exchange unveiled an index composed solely of lenders’ shares, called IBEX 35 Bancos. Through derivatives linked to the measure, investors will be able to hedge or bet on industry-wide moves. The gauge is composed of the seven banks that trade in the IBEX 35 Index, including Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA.

Bolsas & Mercados Espanoles SA is mirroring competitors including Deutsche Boerse AG and London Stock Exchange Group Plc in boosting index offerings to diversify revenue sources. In Spain, the banking industry has the biggest influence on the equity market, accounting for a third of the IBEX 35. That’s a heavier weighting of lenders than other major European equity gauges. The Spanish bourse also launched construction and energy indexes.

“These new indices fit with BME’s strategy of growing its revenue from products not related to volumes,” Fabian Lares, analyst at JB Capital Markets, said by phone from Madrid. “It grows the Ibex family and with that BME will be able to charge for the license of the trademark, providing the information of the indices and for derivative products traded on its own platform linked to these underlying indices.”

Exchanges are seeking new ways to grow sales as regulators are fostering greater competition to reduce trading costs. Indexes generate profit for their owner through licensing deals to creators of exchange-traded funds, futures contracts and other products.

Shares in the new Spanish indexes are weighed proportionately to their importance in the IBEX 35.

— With assistance by John Detrixhe

(Updates with quote in fourth paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE