Press

The international derivatives exchange Eurex will introduce a futures contract on the MDAX® , the midcap equity index on March 21st. Market makers will guarantee liquidity in the new product from the start.

"Midcaps are exhibiting the strongest growth in equities trading. Liquidity in these equities has increased significantly in recent years, and with it the interest of investors," said Rudolf Ferscha, CEO of Eurex. "The MDAX future will enable us to offer investors an efficient and liquid instrument for midcap-related risk management, making investments in these equities more attractive."

Following the restructuring of the German equity market at the start of 2003, and due to the introduction of the Central Counterparty, trading volume in MDAX-equities has increased dramatically. A large number of banks and financial institutions have since launched exchange-traded funds (ETFs), certificates, and warrants based on midcaps. Equity options on the 9 most liquid equities on the MDAX are also listed on Eurex. Trading volume in MDAX equities on Xetra totaled around €53 billion in 2004, which equates to a year-on-year increase of approximately 68 percent. Midcap trading volumes on Xetra have risen, on average, by 35 percent each year for the past five years. Liquidity has also increased further. The Xetra liquidity measure reveals that the implicit transaction costs for an average securities order in MDAX equities, at €25,000, have dropped from 280 basis points at the end of 2002 to 30 bp today (1bp equals 0.01 percent).

Market makers will quote prices in the order book on a permanent basis as soon as the new MDAX future is launched, so as to guarantee its liquidity from the start. Archelon Deutschland and Hypovereinsbank are two companies that have already been appointed as Designated Market Makers.