TRADING VENUES

Exchanges continue to see strong growth on back of data - report

Market data and indices help exchanges to higher growth this year.

By John Bakie john.bakie@strategic-i.com October 12, 2017 9:15 AM GMT

Stock exchange groups have continued to see strong business in 2017 despite global political and economic uncertainty, with total revenues in H1 2017 up 4.1% in a year.

First half combined revenue reached $14.7 billion and could set an annual record by the end of the year, according to a report by Burton Taylor.

Market data and index revenues were major cash generators in 2017 with revenue in these areas increasing by 5.6% to $2.9 billion. Core trading and clearing revenues saw lower growth at 2.5% since H1 2016.

Intercontinental Exchange continues to be the largest exchange group with $2.3 billion of revenue. CME follows with revenue of $1.9 billion and Deutche Boerse comes third with $1.4 billion of revenue.

However, smaller exchange groups saw more rapid growth with London Stock Exchange Group revenues up 5.8% to $1.19 billion, while Nasdaq saw sales jump 8.4% to $1.185 billion.

Andy Nybo, director at Burton Taylor, said: “Diversification strategies continue to drive growth and revenue for the global exchange industry.  The competitive environment is forcing exchanges to aggressively seek out potential opportunities, with market data and index providers the leading acquisition candidates for large global exchanges.”

“Exchanges have been suffering through a prolonged period of muted volatility, resulting in subdued trading revenue growth. Renewed volatility will propel trading activity, however, with exchanges well-positioned to capitalize on increased trading revenues that fall straight to the bottom line.”