BME celebrates its 10th anniversary as a listed company

BME has paid out more than 1.5 billion euros in dividends during its last ten years as a listed company. The TSR (Total Shareholder Return) of BME received by a shareholder who invested in our public offering attained 115% over these 10 years, stated Antonio Zoido, Chairman of BME during an event held today at the Madrid Stock Exchange on the occasion of the company’s 10^th anniversary.

The Chairman of BME also touched upon the crisis, highlighting that highly-leveraged funding has shown signs of entailing excessive, if not hardly controllable, risks. At the same time a new funding model has begun emerging that should correct a highly unbalanced distribution between banks and markets.

According to Antonio Zoido, the system must be brought back into balance with more capital and less debt and the markets themselves have taken care of much of this transformation process as an alternative and complement to more traditional funding.

The Spanish stock exchange, leader in corporate financing

In this sense, a figure that really illustrates the extent to which efforts are being made to achieve more balanced funding and bears out how wisely listed companies have adapted, not to mention the capacity and reliability of the instruments BME manages and makes available to them and the trust of international investors, is that over the past decade, the Spanish stock market has provided more funding to companies than any other exchange in the world, with over 460 billion dollars, according to data from the World Federation of Exchanges (WFE).

Restoring confidence, one of the most difficult tasks

The Chairman of BME noted that “another major, but necessary task since the crisis began, has been to shore up confidence. This situation triggered a regulation and financial oversight reform process, spearheaded by the G-20. The policy, regulatory, institutional and corporate challenge has been huge since then and will continue to be in the coming years”. In this sense Zoido stressed how “All actions taken by BME over these years have pursued a common objective: to reinforce security, stability, responsibility and risk control”.

“There is one figure that, in my opinion, is particularly significant and illustrates the interest in our market and the trust in our system. The internationalisation of the Spanish stock market since 2006, which has raised the participation of non-residents in trading in equities from 58% to over 80% of the total.

“Technology has been a key and necessary factor in achieving this objective. On the one hand, it has helped develop and upgrade securities markets so they can offer new products, shorten order execution time, handle a greater number of transactions and improve the response to customer and investor needs. On the other, it has adapted trading systems to the new policy paradigm”.

A small figure of the solid trading levels reached evidences the importance of adequate IT support: 24 June featured the second largest number of daily trades in the history of the stock exchange (672,000) -the largest was 16 October 2014 (675,000)- compared to a daily average in 2006 of 90,300 trades.

An international benchmark

Turning to our performance indicators, BME is still an international benchmark. In cumulative terms, the efficiency ratio, which measures the relationship between operating costs and revenues, improved to 29.6% in 2015, while return on equity remained at 40.9%, against a backdrop of high financial solvency. Meanwhile, revenue no linked to trading volumes covered more than 117% of costs. We are witnessing a financial revolution and BME shows that it is successfully adapting.

To conclude his address Zoido remembered his words during the opening speech he gave on the occasion of the company’s IPO in 2006, when he stated that, without leaving aside the traditional missions of the stock exchange “we should take on a profile such as that of any other company, seeking to improve our business ratios and generating return for our shareholders”. These goals have been satisfactorily fulfilled.