Statement by Massimo Capuano
President & CEO of Borsa Italiana SpA
"2002 was a complex year for financial markets, brokers, investors and issuers. They were all strongly affected by the instability of the geopolitical situation, the general climate of mistrust following the events involving the U.S. markets in particular and by weak economic growth in all the major industrialised countries.
In spite of these difficulties, Borsa Italiana achieved solid results in terms of growth, efficiency and transparency of its markets, mainly the result of the business model prepared during its first five years of activity.
The acquisition of Monte Titoli, which operates as central securities depository as well as settlement house, represented an important achievement. It has strengthened and developed the Italian business system and enabled the Borsa Italiana Group to reach a significant critical mass, from a corporate standpoint, increasing its ability to provide a broad range of differentiated services.
The integration of Monte Titoli allows the Borsa Italiana Group to reinforce the process of rationalising the activities of the country's financial markets, boosting their qualitative and quantitative growth and strengthening its role in the process of consolidation of the European stock exchanges.
In December Cassa di Compensazione e Garanzia (CC&G) launched the Central Counterparty service for Italian Government bonds, pursuing the Group's policy of diversification into added value business areas by realising one of its first initiatives directed at the non-captive market.
For the core business, the new OM technology platform for trading on IDEM - the Borsa Italiana derivatives market - began operating in April. With a capacity six times greater than the previous system in terms of quantity of orders and quotations handled, it has improved market efficiency, allowing the launch of new products: in July 2002 the first five IDEM stock futures and between May and June four new stock option contracts. It has also contributed to a marked increase in volumes, up 23% since April. MiniFIB trading rose particularly strongly, 1,400,000 to 2,130,000 standard contracts during 2002.
Additionally, September saw the launch of the new MTF segment trading funds, SICAVs and Exchange Trading Funds, funds tracking the performance of an underlying index which are traded like stocks.
Thanks to 14 admissions and 13 withdrawals - 21 in 2001 - the stock market maintained a good level of liquidity with an appreciable growth in the second half of the year.
According to the main variables that measure the performance in the exchange industry, the Italian Exchange is fifth in Europe for capitalisation and fourth for trading volume through its electronic systems, while it is the best for performance of the index.
The STAR segment, which today counts 41 listed companies, has gradually demonstrated its ability to value quality small and mid caps; the MibSTAR index has clearly outperformed the general index. Despite the general difficulties of the hi-tech and hi-growth sectors, the Nuovo Mercato - second in Europe for capitalisation and trades - has reaffirmed its validity as an important tool for furthering the growth and competitiveness of Italian businesses in the technological and innovative sectors.
With 6,700 admissions, the covered warrant market has reaffirmed itself among the most appreciated on a European level for the efficiency of its technical-computerized market model.
Regarding transparency, Borsa Italiana has introduced into the Italian context controls on internal dealing and collaborated in drawing up the "Guide to Market Information", which integrates the legislative and regulatory provisions with lines of conduct to improve information about listed companies.
In July, the review of the Code of Conduct for Listed Companies, published in 1999, has been completed: the Committee for Corporate Governance, meeting at Borsa Italiana, introduced - with reference to national and international best practice - a more precise definition of the role of independent directors, the internal control function and transactions with related parties.
The rearrangement of the former trading floor of Palazzo Mezzanotte, headquarter of Borsa Italiana, which was carried out by the subsidiary Piazza Affari Gestione e Servizi, enabled the creation of the Congress and Training Centre which has become an active reference point for the business and financial community for the prestige of its location and its particular technical features.
Borsa Italiana continued to expand BIt Systems, the ICT company in partnership with SIA which is able to offer innovative services to the Group's companies as well as the non-captive clientele. In particular, agreements for cooperation were joined with important hardware and software suppliers to create the most advanced solutions for market-related network services.
Lastly, this year the Borsa Italiana website www.borsaitaliana.it achieved new records with over 132 million pages visited during the year and almost 300,000 single visitors on a monthly basis and, thanks to its information products, established itself among the foremost Italian financial sites."
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