Ellan Dineen from the Luxembourg Stock Exchange (LuxSE) has published a report noting main market insights from 2023, main news and announcements and key figures highlighting how the exchange expanded its global footprint, pioneered sustainable finance and developed its activities.

2023 saw interest rates at record levels and increased geopolitical tensions, and it also marked clear steps towards the critical climate transition – with COP28 in Dubai becoming the first COP meeting to call for a transition away from fossil fuels.

Strong activity levels

Despite a challenging macroeconomic and geopolitical context, in 2023, LuxSE welcomed a total of 13,900 new securities. This represented a 13% increase compared to 2022 and a record year for listings since 2007. The total amount raised on LuxSE’s markets in 2023 represented the equivalent of €1.2 trillion, an 8% increase year-over-year, and an amount which has served to fund projects and fuel investments all over the world.

92 new issuers from 24 countries joined the exchange in 2023, bringing the total number of active issuers last year to 479, issuing securities across 53 currencies. LuxSE now serves 1,800 issuers across 100 countries. LuxSE now holds a market share of 34% in terms of international bonds listed worldwide according to figures from Dealogic. With over 42,000 total securities listed, including 38,000 debt instruments, LuxSE is a reference venue for Eurobonds and continues to serve issuers from a broad range of industries and geographies.

In 2023, bond trading activity on LuxSE increased by more than 130% compared to the previous year. For LuxXPrime, for instance, a window on LuxSE’s trading platform dedicated to retail-sized trading in fixed-income securities –now offering 1,500 securities – the number of trades was up by more than 200% year-over-year.

The UN-awarded home of sustainable finance

Similar to previous years, 2023 was shaped by the strides taken in sustainable finance through the leading platform for international sustainable debt securities, LGX.

2023 marked the halfway point between the signing of the Paris Agreement and its 2030 goals. At the end of the year, LGX counted more than 3,600 securities on its UN-awarded platform – including over 1,870 green, social, sustainability and sustainability-linked bonds making up a total issued amount of €977 billion from more than 300 issuers based in 60 countries throughout the world.

Among the milestone bond listings celebrated in 2023, there were:

  • the first Cape Verdean green bond focused on the blue economy, issued by the International Investment Bank and known as the iib Marine and Ocean-Based Blue Bond was admitted on LuxSE exchange and displayed on LGX thanks to its cooperation with Bolsa de Valores de Cape Verde;
  • during the annual International Women’s Day celebrations, LuxSE welcomed the first gender bond from Sub-Saharan Africa issued by NMB Bank Plc in Tanzania.

On the topic of gender finance, in 2023 LuxSE became a founding member of the Luxembourg Women in Finance Charter, and it dedicated its COP28 side event with UN Women to gender finance. Furthermore, it released a market study on the gender-focused bond market and launched a new LGX Academy course dedicated entirely to the topic.

Focus on Emerging Markets

In 2023, LuxSE marked important efforts to unite international capital markets by joining forces with Chongwa (Macao) Financial Asset Exchange Co., Ltd (MOX), China Everbright Bank, the Abu Dhabi Exchange and Bolsa de Valores de Cabo Verde (BVC) to advance the sustainable finance agenda in new regions.

The LGX Academy’s lecturers also continued to focus their efforts on bolstering sustainable finance education in emerging markets, which included:

  • trainings in Sri Lanka through the LuxSE partnership with United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) and the Ivory Coast following a 2022 Memorandum of Understanding with Bourse Régionale des Valeurs Mobilières (BRVM);
  • as the International Certifying Institution of Governart and the Santiago Stock Exchange’s ESG Analysis Certification programme, LuxSE issued certificates to participants from Chile, Mexico and Guatemala in 2023;
  • co-hosting the International Finance Corporation (IFC)’s 3-day Green Bond Technical Assistance Programme (GB TAP) Green, Social and Sustainability (GSS) Bonds Executive Programme in Luxembourg in November which gathered senior bankers from seventeen different emerging economies, representing 22 different financial institutions.

Digitalising capital markets

In June, LuxSE welcomed the first digital Climate Awareness Bond issued by the European Investment Bank (EIB) on their exchange, with the World Bank then making history in October by issuing the very first financial instrument issued on a Distributed Ledger Technology (DLT) and admitted to trading in the European Union (EU) on the LuxSE EU regulated market. Furthermore, in December, LuxSE celebrated the display of the 1,000th green bond on LGX, and it was the €10 million digitally-native green bond issued by Société Générale which brought them over the 1,000 mark, Ellan Dineen pointed out.

In 2023, LuxSE also launched LuxTrader, a new tool through which trading members can connect to their trading platform more efficiently and in  a cost-effective manner.

International recognitions

LuxSE preserved the title of Exchange of the Year for the sixth time since 2017 at Environmental Finance’s Bond Awards 2023 for their trailblazing efforts in the realm of gender finance and emerging markets. Several LuxSE employees were recognised as experts in their fields at different occasions.

A new recognition came in just a few months shy of the third anniversary of the LGX DataHub when, in May, together with the International Capital Market Association (ICMA), LuxSE announced that ICMA’s new database dedicated to sustainable bond data would be powered by data from the LGX DataHub.

Thanks to the data available on the LGX DataHub, several major international players also published market studies in 2023, including the Organisation for Economic Co-operation and Development (OECD), which produced a report on the GSSS bond market in developing countries, assessing the role of donors in supporting GSSS issuances of the public sector in developing countries.