| euronext.com

Thu, 09/02/2023 - 10:00

Euronext’s upgraded SBTi-aligned climate targets were validated by the Science-Based Targets initiative:

By 2030, Euronext will reduce its Scope 1 and Scope 2 market-based greenhouse gas emissions by 73.5% compared to 2020; (Up from 70% previously announced in June 2022)
By 2030, Euronext will reduce its Scope 3 business travel emissions by at least 46.2% compared to 2019;
By 2027, Euronext suppliers, representing 72% of Euronext’s greenhouse gas emissions derived from purchased goods and services, must set targets on their Scope 1 and Scope 2 emissions. (Up from 67% previously announced in June 2022)

How we will achieve it

Scope 1 | Consolidation and energy efficiency upgrades in the building portfolio, energy efficiency investments, de-commissioning of gas-fired boilers and de-commissioning of vehicle fleet

Scope 2 | Moving office space and data centres to renewable energy, including through the move of Euronext’s Core Data Centre

Scope 3 | Implementation of sustainable travel programme

Supplier engagement | Direct engagement and new supplier onboarding platform, which will support the ‘Euronext Supplier Code of Conduct’, including provisions regarding environmental protection, human rights, diversity and inclusion.

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Thu, 09/03/2023 - 09:00

What is a bond?

Nathalie Masset, Head of Fixed Income at Euronext, explains all you need to know about bonds and what are the benefits of investing in them.

Listen to the full interview. Watch the video.

What is a bond?

A bond is a financial product representing a fraction of a loan.

Bonds are issued by:

a company,
a bank,
a state,
a community,
or a city.

This fractional loan is freely tradable on the market by both retail and professional investors.

A bond is a debt issued by an organisation and purchased on the financial market by an investor.

Coupon and interest rates

Just like credit given by a bank, a bond pays the investor a monthly, quarterly, or annual return. This brings up the topic of coupons which reflect the bond’s interest rates. An interest rate can be fixed, meaning established in advance, or predictable because its is determined by a formula that is established in advance.

What is the difference between a stock and a bond?

The main differences are in the rights they grant.

A stock is an equity instrument that gives the investor rights and duties as an owner.
A bond is a debt instrument that contractually binds the lender (the investor) and the borrower (the company) for a defined period.

Bond holder vs shareholder

Essentially, a bondholder becomes the bank that finances a company’s projects against a return A shareholder becomes a partial owner of a company: the results of their investment are subject to the financial results and performance of the company.
As a bondholder, you receive regular interest payments and reimbursement of your investment at maturity, no matter what happens.

Are there different types of bonds?

There are two main types of bond, depending on the issuer:

governments and similar bodies,
and private companies.

Govies and Corporates

In the market, bonds issued by governments such as France, Germany and the United States are commonly called “govies”. Bonds from private companies are known as “corporates”.

Corporate bonds are issued by entities that are neither governmental nor from the public sector. They are generally industrial companies, national index companies, for instance the CAC 40, or financial institutions.

Investment grade and speculative grade

We also need to draw a distinction between:

corporate bonds whose financial health is highly rated by rating agencies, which are called “investment grade” bonds;
and bonds that are less highly rated by agencies, which are called “speculative grade” bonds.

Why invest in bonds?

An investor should always carefully assess the reasons to invest in one asset class over another. It is important to understand risks and possible returns.

The advantages of Bonds:

Stabilise your income
Stable prices plus a contractually defined yield (i.e. the amount of return an investor will receive) mean that future earnings can be calculated with varying degrees of accuracy. This is why bonds are also called “fixed income” products. Bonds are some of the only financial instruments that offer such predictability.
Diversify your portfolio
From a risk diversification perspective, adding bonds to your portfolio tilts your risk away from more common risk factors that tend to impact stocks.

For a second opinion, investors can use rating agencies which are continuously screening and monitoring companies, and tend to be rather conservative in their assessments.

Finance the real economy

The primary reason for investing in bonds remains economic. Bonds are the only financial instruments that directly impact the financing capacity of companies.

A company, state, region, or municipality that issues bonds does so to finance:

a project,
an acquisition,
or construction.

By investing in bonds, you are directly financing the issuer’s projects by acting as the issuer’s bank. In other words, you are financing the real economy.

How do I invest in a bond?

Retail investors cannot access the financial markets directly. They need to create an account with a broker or go through their bank. This intermediary will connect the retail investor to the stock exchange and place their investments.

Are bonds available on Euronext?

Yes, we have over 9 000 tradable instruments on the Paris, Brussels, Amsterdam, Lisbon and Milan regulated markets. These bonds come from more than 1 000 issuers and include government, credit and financial bonds.

ESG Bonds

Moreover, we have a selection of ESG fixed income instruments that are issued only to finance or refinance new and existing sustainability projects.

Learn more about bonds

Visit our website to discover our wide bond offering and find out more about Fixed Income trading,

Or download our Bond guide for retail investors. Also available in French, Dutch and Portuguese.

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Tue, 21/02/2023 - 17:00

Volatility in commodities markets

Volatility in the commodities markets surged significantly in 2022. This was mainly due to the invasion of Ukraine by Russia in February 2022, and to increased consumption following years of Covid.

The grains and oilseed markets were at the centre of this storm, which was exacerbated by unfavourable weather conditions in some producing areas.

Increased volatility in the grain markets prompted all participants along the value chain, in particular producers, end users and transformers, to seek efficient tools to manage their price risk in order to lock in margins and insure sustainability of their business.

Growing volume Euronext MATIF

This trend has been reflected in growing volume across Euronext MATIF considered as a very useful tool for market players across the world to lay out the price over last years.

The Euronext MATIF grains franchise has grown significantly over the last five years, with volumes increasing by 40%.

Liquidity has continued to build in the milling wheat contract, which has become a global benchmark.

Euronext Milling Wheat, Rapeseed and Corn Futures & Options
Average Daily Volumes and Open Interest

Euronext Milling Wheat, Rapeseed and Corn Futures and Options –
Average Daily Volumes and Open Interest

_{Source: Euronext Group}

Options have become an attractive hedging tool over futures over last few years following increased volatility in the markets leading to higher margin requirements by clearing houses.

Milling Wheat Options exceeded an average volume of 9,000 lots per day in 2022:

Euronext Milling Wheat Options (OBM)
Average Daily Volume and Open Interest

Chart Euronext Milling Wheat Options (OBM) - Average Daily Volume and Open Interest

_{Source: Euronext Group}

This publication is for information purposes only and is not a recommendation to engage in investment activities. This publication is provided by a third party unaffiliated with Euronext, the content therein is not provided or controlled by Euronext nor does it constitute Euronext’s opinion. This publication is provided “as is” without representation or warranty of any kind. Euronext will not be held liable for any loss or damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication shall form the basis of any contract. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. All proprietary rights and interest in or connected with this publication shall vest in the party that provided this publication. No part of it may be redistributed or reproduced in any form without the prior written permission of this party.

Euronext refers to Euronext N.V. and its affiliates. Information regarding trademarks and intellectual property rights of Euronext is located at euronext.com/terms-use.

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Fri, 05/05/2023 - 09:00

The national ESG blue-chip index dedicated to the Italian market.

Serving as the new ESG index reference in Italy

The MIB^® ESG Index is designed to identify the 40 highest ranking companies in Italy which demonstrate the best ESG (Environmental, Social and Governance) practices.

Combining an Italian footprint with global reach, this index is built with a local focus in mind and created in partnership with Borsa Italiana.

After a large consultation with the Italian players, a methodology with globally recognised standards was created for the Italian market to serve as the new national ESG reference.

MIB ESG index key principles

The index’s methodology reflects a ranking of the top 40 Italian listed companies based on ESG criteria. The selection is made from the 60 most liquid Italian companies and excludes companies involved in controversial activities. Components of the index are free-float market capitalisation weighted.

The index methodology also includes exclusions filters with regards to the following Global Standards: