Liquidnet today announced record fourth quarter results across its global operations as it ended the year as the only major non-displayed liquidity provider to post a fourth quarter volume increase in domestic average daily volume1. Further distancing the firm from its competitors, ITG’s Plexus BrokerEDGE Monitor ranked Liquidnet the top broker in execution quality and value added per trade for both NYSE and Nasdaq securities2. Globally, European and Canadian divisions reported double-digit volume increases quarter-over-quarter as Liquidnet continued to bring new liquidity to its 472 Members with entries into Asia, Greece and South Africa (the first crossing alternative trading system to launch in that market).
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-- Liquidnet U.S. attracted heavy block volume that propelled it to a 36 percent increase in its average daily share volume3 year-over-year (72.7 MM shares v. 53.6 MM shares) and a 17 percent increase in average daily share volume over a record previous quarter (72.7 MM shares v. 62.2 MM shares). Liquidnet Members' average execution size was the highest in 20 quarters (since Q1'02) at 54,400 shares. For Q4, Liquidnet's total U.S. block volume market share reached a record at 3.8 percent, paced by a company high of 76 million-share trades. |
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Liquidnet's streaming ATS - Liquidnet H2OTM - achieved an average of 2.2 billion shares of liquidity per day, a 17 percent increase over the previous quarter. This streaming liquidity combined with the natural liquidity Liquidnet's Members provide, brings the combined liquidity of Liquidnet's two ATSs to a record 4.5 billion shares. |
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SupernaturalTM, the firm's quantitative single stock and portfolio strategies4, continues to lead the industry with a 25 percent crossing rate5 across all market caps, compared with an industry average of 4 percent - 11 percent for comparable crossing systems6. |
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-- Liquidnet Europe continued to double its principal traded for the fourth consecutive year, while pioneering new markets and scaling industry league tables. It completed 2007 with a 174 percent increase in principal volume, year-over-year (£4.4 billion to £12.1 billion), punctuated by a strong fourth quarter that saw a 48 percent increase over the prior quarter (£8.2 billion to £12.1 billion). In addition, Liquidnet Europe moved quickly up the London Stock Exchange rankings to become the 3rd largest agency broker on the LSE7 in December and completed its second year in a row ranked number one by ZYen Limited for clearing and settlement. |
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| On October 17, the firm also became the first crossing ATS to trade in South Africa and later in the quarter added Greece, further expanding its European presence to 22 markets. |
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-- Liquidnet Canada finished the year as the top ATS in the country for all of 20078, capping off a record quarter that posted a 205 percent increase in share volume over the previous year9 (926,733 v. 304,066) and a 25 percent increase in share volume over the previous quarter (926,733 v. 743,171). Average daily liquidity increased 16 percent over the previous quarter to break above 200 million shares. |
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-- Liquidnet Asia successfully launched its Asian operations on November 29, 2007, trading Hong Kong, Singapore, Korea and Japan (offshore) equities. Since launching, Liquidnet Members have traded mostly difficult mid and small cap stocks in Hong Kong and Japan, with an average trade size of US$626,569, which is 34 times the average deal (trade) size on the Hong Kong Stock Exchange. |
“The challenging global markets are creating an international flight to quality liquidity,” said Seth Merrin, CEO of Liquidnet. “Buyside investors are looking for places where they can execute trades that may represent several times the average daily volume in a name. That is where we excel and have distinguished ourselves from the competition.”
About Liquidnet
Liquidnet, the top broker for execution quality and value added per trade according to Plexus, is the top brokerage firm for global trading. Liquidnet allows money management institutions to trade large blocks of equities directly and anonymously with significant price improvement and little-to-no market impact. Liquidnet launched in 2001, and the company now enables its Members to trade in 28 equity markets globally. Liquidnet is headquartered in New York with offices in London, Toronto, Tokyo, Hong Kong and Sydney. Additional company information is available online at www.liquidnet.com.
Liquidnet, Inc. is a registered U.S. broker/dealer and a member of FINRA/SIPC. Liquidnet Europe Limited is regulated by the U.K. Financial Services Authority and is a member of the London Stock Exchange. Liquidnet Canada Inc. is regulated by the Ontario Securities Commission and is a member of IDA/CIPF. Liquidnet Asia Limited is regulated by the Hong Kong Securities and Futures Commission as a licensed dealer and a provider of automated trading services pursuant to the Securities and Futures Ordinance and is a member of the Hong Kong Stock Exchange. Liquidnet Asia Limited is also regulated by the Monetary Authority of Singapore as a Recognized Market Operator. Liquidnet Japan Inc. is regulated by the Financial Services Agency of Japan and is a member of JSDA/JIPF. Liquidnet Australia Pty Ltd. is a licensed corporation under the Corporations Act of Australia, AFSL number 312525.
1 According to Sandler O’Neill report: eFinance 4Q07 Earnings Preview.
2 BrokerEDGE MonitorTM, published: January 2008, covering fourth quarter 2006 – third quarter 2007.
3 Fourth quarter share volume includes trades executed in the Liquidnet Negotiation ATS, Streaming ATS and portions routed to external public markets.
4 Supernatural orders executed in Liquidnet H2O are defined as an order created to interact with Streaming Liquidity Partner orders (sell-side flow) and natural liquidity (Buyside liquidity) while routing portions of the order to external public markets.
5 Crossing rate is defined as the percent of shares executed within Liquidnet versus the number of shares ordered.
6 According to Aite Group’s September 2007 report “Rise of Dark Pools and Rebirth of ECNs: Death to Exchanges?”
7 London Stock Exchange’s Market Share Data-X Reporting, date range: From 01/12/2007 to 31/12/2007.
8 According to Market Regulation Services, Inc., the independent regulation services provider for Canadian equity marketplaces, in its “Report of Market Share by Marketplace – Fourth Quarter of 2007.”
9 Liquidnet Canada began operation 10/24/06, thus after the fourth quarter had begun.