Driven By 5.6% Increase In Market Data And Index Revenues Accordin Latest Burton-Taylor Report

Global trading and clearing revenues report marginal growth, rising 2.5% over H116 levels.  Revenues from Market Data and Index activities continued to see strong growth with revenue totaling $2.9 billion in H117, up from $2.7 billion in the comparable period in 2016. Exchanges remain focused on diversification strategies, as muted volatility and stagnant transaction revenues force attention to attractive growth opportunities. 

London and New York, October 12, 2017 – Global exchange revenues are on pace to set an annual record, according to a Burton-Taylor International Consulting (part of TP ICAP’s Data & Analytics division) report published today. Revenues totaled $14.7 billion in the first half of 2017, up 4.1% over the year earlier period, as exchanges continue to explore acquisition opportunities to diversify away from transactional revenues in the face of anemic trading volumes.

Other key findings include:

  • Intercontinental Exchange, the largest global exchange, held its position with total revenue of $2.3 billion, accounting for 15.9% of total industry revenues in the period. CME Group remained second with revenues of $1.9 billion, up 0.7% from H116. Deutsche Boerse placed third with $1.4 billion in revenues, a decline of .08%.
  • London Stock Exchange Group and Nasdaq both reported strong growth in revenues during the first half of 2017. The London Stock Exchange recorded $1.191 billion in revenues, an increase of 5.8%. Nasdaq reported revenues of $1.185 billion, a 8.4% increase.
  • B3 (formerly BM&FBovespa) reported the fastest revenue growth in H117, with revenue increasing by 61.2% to $496.8m on its acquisition of CETIP.  CBOE reported revenue growth of 54.2%, largely due to its merger with BATS Global Markets.
  • In Asia, Hong Kong Exchange Group saw a 2.1% increase in revenues in H117 to $692.0 million, due to strength in listing revenues.  Japan Exchange Group reported a 2.7% decline in revenues in the period, due largely to weak trading and clearing revenues.

In terms of business segments, the report found:

  • Trading, Clearing and Settlement revenues totaled $9.3 billion in the first half of 2017, an increase of 2.5% over the year earlier period. Trading, clearing and settlement revenues continue to account for a declining portion of total industry revenues.
  • The Market Data and Index segment accounted for $2.9 billion in revenues for the period, representing 19.4% of total exchange industry revenues. The London Stock Exchange Group and NASDAQ both reported strong index revenue growth.
  • Listing and issuer service revenues increased 3.4% over the year-earlier period, totaling $1.3 billion on a strengthening environment for global IPO listings.
  • Market Technology and Access segment revenues reported a 9.5% increase, totaling $794.8 million in the H117 period. Nasdaq remained the segment leader with total revenues of $281.0 million, an 11.1% increase.  CBOE reported a 68.2% jump in segment revenues a result of its acquisition of BATS Global Markets

“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” says Andy Nybo, Director at Burton-Taylor.  “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.”