Thought it would be interesting to review what is happening in the exchange and venues world. Usually it is the counters on the exchange which get reported. Below are some articles, with links, I think are interesting.
The articles do highlight 3 trends:
- The importance of information services and data to the exchanges.
- Exchanges interest in electronic trading platforms in Over-The-Counter markets, especially FX.
- They are big businesses with large market caps.
The WSJ was one of the few news wires to cover MarketAxess’s US$150 Million purchase of LiquidityEdge. While both are active venues in Bond Markets, MarketAxess has until now not ventured beyond Corporate Bonds, LiquidityEdge is a US Treasury venue with an added price data play.
From Reuters. A little older but seems to have got lost in the LSE/Refinitiv news tsunami, Euronext boss Stephane Boujnah, announces Euronext’s belated moves towards bulking up its data business.
Interesting take from ‘The Motley Fool’ highlighting technology when they really should have been talking data. The 2017 Trayport purchase from ICE has made a positive impact.
Reuters reports drop in trading fees and a desire for big IPOs, but the HKEx does not make it easy because it is really expensive to list, with onerous paperwork on top. The RMB currency derivatives look like a hit with exchanges taking a far more active role in the FX markets. HKEx is currently the 3rd largest exchange by market cap.
Again a little older and from Reuters, not unexpected with LSE buying Refinitiv they were hardly likely to sell Reuters FX broking business to a rival. Another example of exchanges moving into FX markets by buying Multi-Lateral Trading Facilities (MTF/ATS-electronic trading platforms).
Investors Chronicle believes the market is turning for TP ICAP since the acquisition of ICAP’s voice broking and information services businesses in 2018. Certainly the data business should be targeted for growth.
Simply Wall Street reviews ICE’s phenomenal market cap growth. More analysis can also be found on marketdata.guru.
The large exchanges’ market capitalisation seems to have flown under the radar, but an important driver of this, the switch to higher margin, more stable information services business comprising data, analytics, and indices gets less attention than it deserves.
Jack Brumby of Stockopedia looks at the LSE’s dividend cover and paints a positive picture. I wonder what impact the ‘acquisition’ of Refinitiv will make?