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Boom time for exchanges

Stock exchanges around the world are reporting an uptick in their profits, as COVID-19 volatility pushes up their revenues from higher transactions.

The New York Stock Exchange, NASDAQ, Tokyo and Japan exchanges have all reported a surge in their revenues in the March quarter, as the markets became more volatile.

Exchanges generate their revenues from trading-related fees (like transaction, clearing, settlement, depository and broker services) and non-trading-related fees (like data and listings). As volatility spiked with COVID-19's onset, so did the trading and hence the revenues for stock exchanges.

Intercontinental Exchange (ICE) -- which owns the NYSE, clearing houses and sells data and listing services -- yesterday reported its strongest quarter in the company's history.

ICE's revenues for the first quarter grew 23% year-on-year to US $1.6 billion while operating income grew 32%.

Trading and clearing brought in US$883 million for the quarter, up 44% from a year ago, while data and listing contributed US $676 million to the revenue, rising 3-4% in the year.

The second biggest exchange (by market cap), NASDAQ, saw an 11% year on year increase in its net revenue for the first quarter to US$701 million, in results announced on April 22.

NASDAQ's revenue is split across non-trading segments (which increased 7%) and market services revenues (which were up 21%).

It attributed the latter to "historic trading volumes in the second half of the first quarter".

London Stock Exchange acknowledged the "unprecedented market backdrop" in its first quarter results.

It posted a 13% year on year increase in total income to £615 million, driven by increased equity trading in the capital markets and higher clearing activity across listed and over-the-counter products. Its SwapClear platform for clearing posted record volumes during the quarter.

In Asia, Japan Exchange Group (owner of Tokyo Stock Exchange, the world's third largest) upped its revenue, net income and EPS forecasts at March end, citing the change in average daily volumes.

It increased its operating revenue for the year ending March 31 from 117,000 million Yen to 123,000 Yen. Operating income guidance was increased from 60,000 million Yen to 67,500 million Yen.

JPX's guidance for its EPS increased from 78.44 Yen per share to 88.71 Yen while the annual dividend forecast also increased from 48 Yen to 54 Yen after accounting for a 6 Yen increase in the year-end dividend from increased trading.

Read more: NASDAQIntercontinental ExchangeJapan Exchange GroupLondon Stock ExchangeNew York Stock ExchangeTokyo Stock Exchange
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