Bats Europe, the Europe equities exchange unit of CBOE, announced on Wednesday it has launched two new indices – the Bats Brexit High 50 and Bats Brexit Low 50, as a way to measure the impact of the Brexit on UK-listed companies.
For the purpose, the exchange has partnered with FactSet, a global provider of integrated financial information, analytical applications, and industry-leading services. The indices utilise FactSet’s Geographic Revenue Exposure (GeoRev) data to geographically analyze where UK-listed companies generate their revenues.
The two indices will analyze the difference in performance between those companies that generate a large portion of their revenues from the UK compared to those that have less revenue exposure to the UK.
They constitute of the top 100 UK-listed companies based on market capitalization, or those in the Bats UK 100 Index (BUK 100), which were split into two groups – with the largest and smallest proportion of GBP revenues. They are calculated in real time under the same rules and methodologies used for other Bats benchmark indices and published on the Bats Indices website, as well as on Bloomberg and Reuters.
The UK voted on 23 June, 2016, to exit the European Union (Brexit). As a result, the future of many financial institutions across the EU, and in the UK in particular, seems unclear. A license issued by UK’s Financial Conduct Authority (FCA) currently provides admission to all countries in the European Economic Area (EEA), but soon FCA license holders will lose access to these markets. Many companies, including forex brokers, are expected to fleet from the country.
“The UK’s triggering of Article 50 is expected to lead to fundamental changes in the way businesses and capital markets behave prior to and subsequent to the UK’s separation from the European Union,” said Mark Hemsley, president of Europe for CBOE. “We are pleased to provide the marketplace with benchmark indices that are designed to gauge investor sentiment towards UK companies during this critical time. We are providing these bellwethers of the British economy through our network of vendors free of charge so that they are readily available to all as we navigate the complexities of Brexit,” he added.
Bats Europe is a brand name of UK-regulated exchange Bats Trading Ltd. It is part of Chicago Board Options Exchange (CBOE), which acquired Bats Global Markets in February last year. The UK exchange offers trading in more than 5,500 securities across 15 major European markets.