UK Broker Group Launches More Energy Indices
The London Energy Brokers’ Association (Leba) launched September 3 two new data sets to complement its existing suite of market enhancing indices: UK NBP, which joins its other continental gas indices; and European power indices, which join the UK power indices.
The indices expand the so-called 'Tankard' indices, including one for NBP, which were based on TP-Icap and Marex Spectron trades and were available free-of-charge until publication ceased in August 2017. In contrast Leba's new indices are based on all their member-brokers.
NGW understands that they cost subscribers a fraction of the daily market reports published by price reporting agencies (PRAs) but they do not come with value-added information, such as market commentaries explaining the price movements from day to day, or within-day.
The volume-weighted price indices (VWAP) “offer a comprehensive set of data points determined by including both physically delivered and financially settled natural gas futures, giving market participants a unique view of daily trading activity,” Leba said.
The Leba NBP Indices and the Leba European Power Indices are based on day ahead, weekend, and month ahead contracts and are VWAPs of all trades transacted through Leba members between 07:00 and 17:00 UK time.
Leba CEO Alex McDonald said the indices were developed in collaboration with broker members in response to increasing customer demand.
“We have been focused on the development of our product offering to ensure that we can support market demand for Indices which are built on traded data that is robust and reliable. In doing so, these indices will help market participants to make better informed trading decisions and conduct thorough market analysis,” he said.
He told NGW September 4 that Leba aggregates the trade feeds from all of its members, large and small, and applies its methodology to create VWAPs from robust, trade-based data. This includes the total volume for all of the trades for physical or financial settlement, and also takes outliers into account.
“We do not compete with the PRAs as we do not report indicative market judgment or other value-added services, but we do provide transactional transparency and integrity. This includes traded windows where the market could benefit from specified time periods. Leba provides a robust and cost-effective data provision service to the markets,” he said.
Leba is the sister association to the European Venues and Intermediaries Association (EVIA), formerly known as the Wholesale Market Brokers Association (WMBA), which is concerned with other instruments such as foreign exchange.
Before screen based trading, PRAs would collect trades from telephone surveys of the market at the end of each day, to compile the VWAPs. This activity had a random element to it, and so the PRAs also published end-of-day assessments for the most liquid contracts, in case the VWAPs were not reliable. Not all traders use brokers all the time.