* Volumes rise in all power, gas and carbon contracts
* Italian, Spanish power, coal in focus in 2014
* EEX hopes Singapore acquisition will bear fruit
(CEO gives details, comments on activities)
By Vera Eckert
LEIPZIG, Germany, April 9 The European Energy
Exchange (EEX) posted a 5 percent rise in trading of its
flagship electricity futures for January through March,
benefiting from declining over the counter market participation
amid tighter EU financial regulation.
Continental Europe's biggest power bourse on Wednesday
reported 350.3 terawatt-hours (TWh) of futures traded compared
with 333.3 TWh a year earlier, according to material issued at a
news briefing at the EEX in Leipzig.
This followed on from higher volumes last year, when
regional expansion and cooperation with other energy market
operators had boosted trading.
EEX data are a pointer to trends in energy wholesaling as
trading in its annual contracts reflects the fundamentals of the
European power markets.
Trading on EEX has reached 20 percent of German wholesale
power market volumes, from 15 percent in 2012.
"The trend towards more participants and more volume from
existing members seen last year stays intact and our market
makers set more narrow spreads, which improves price
reliability," chief executive Peter Reitz told reporters.
He said that the numbers across gas, carbon and power boded
well for 2014 volume and earnings prospects.
"We are growing in all areas, which makes it not unlikely
that 2014 results could be above 2013," he said.
"However, the market environment is difficult and the wider
over-the-counter market is receding. Therefore, it is not
guaranteed that we can escape the impact of overall trends."
Increasing regulation has prompted some operators to switch
to exchange trading from OTC. Reitz said the transparency of the
bourse as well as the clearing services of its subsidiary ECC
gave traders more certainty, as Europe tightens regulations to
eliminate manipulation and overly risky strategies.
However, advocates for OTC markets say they preserve
participant anonymity and give more leeway to fine tune trades.
NEW PRODUCTS, NEW REGIONS
But EEX faced weak energy demand in the euro zone and supply
competition from renewable energy that is not exchange-traded.
Several banks last year responded to the changing
environment by pulling out of energy trading.
EEX expanded its regional reach into Italian, Dutch,
Belgian, Scandinavian and Swiss power futures last year. In
2014, it is targeting Spanish products and is due to open an
office in Milan, on top of Leipzig, Paris and London.
EEX last spring created a pan-European gas market with
French Powernext SA called PEGAS. Gas and carbon, where the
bourse widened its role of market auctions host on behalf of the
European Union for 26 member states, showed big gains.
Turnover rose 30 percent to 62.6 million euros ($86.4
million) in 2013 of which carbon accounted for 1.6 million, and
pre-tax profit (EBT) was up 32 percent at 17.3 million euros.
The EEX would revive the idea of coal contracts this year
after meeting little interest from the trading community, Reitz
said, adding there was interest from power generators.
EEX is majority-owned by German-Swiss Eurex, the derivatives
unit of Deutsche Boerse.
In 2013, it bought a 52 percent stake in Singapore's CLTX
exchange to get a foothold in Asian shipping and coal markets,
but Reitz said the relationship would work both ways.
"If we tie Asian customers to our clearing services, we may
be able to interest them in our other products as well," he
($1 = 0.7249 Euros)
(Reporting by Vera Eckert; editing by Dale Hudson and Keiron