Global Exchange revenues in 2017 totaled a record $30.7 billion, increasing by decent 8.1 per cent against 2016, on the back of pick up in trading, clearing and settlement revenue supported by industry growth, according to Burton-Taylor International Consulting.
The industry revenue was driven by a 6.4 per cent increase in transaction-based revenues, with record revenues coming from this segment at $19.3 billion in 2017. Strong industry growth across all business segments, with information services revenues, reported 9.1 per cent growth against 2016 figures. Some key findings of the overall industry sentiment in 2017:
- Global growth was led by London Stock Exchange Group (LSE) and Hong Kong Exchanges and Clearing (HKEX)
- Intercontinental Exchange retained its position as a leading global exchange while CME Group and Deutsche Boerse were in second and third position respectively
- Cboe Global Markets and B3 gain global market share through acquisitions strategies
Exchanges continued to invest in building out information products, with acquisitions coming in as the preferred strategy to fuel segment growth. Market technologies and access segment revenue increased by 8.1 per cent while listings and issuer services registered 6.2 per cent growth. There was also 47.6 per cent increase in other exchange business segment, as interest revenue from exchange clearing house operations surged following a spike in interest rates in 2017. Some key findings:
- Intercontinental Exchange (ICE) reported 15.1 per cent of the total industry revenues, contributing almost $4.6 billion, a growth of 2.9 per cent from 2016 while CME Group came in second with almost 12 per cent of total industry revenues at $3.6 billion in 2017.
- Deutsche Boerse was the largest exchange in the EMEA region accounting for almost 21.9 per cent of the region’s revenues in 2017, followed by the LSE Group with 16.1 per cent of the total.
- HKEX was the largest exchange in Asia with a total market share of 19.3 per cent, followed by Japan Stock Exchange with a share of 13 per cent.
- Operating margins of exchange industry continued to remain healthy with EBIT operating margins of 53.6 per cent in 2017. Australian Stock Exchange generated the highest margin at 71 per cent for 2017, followed by HKEX at 66 per cent.
Andy Nybo, Director at Burton-Taylor commented:
“Global economic strength supported renewed growth in the global exchange industry in 2017, as rising transaction-based revenues propelled the industry to record levels. Exchange diversification strategies are beginning to pay off, as revenues from information services and other business activities contributed to industry gains. Expanding trading and data capabilities into fixed income and foreign exchange is also supporting industry revenues, especially in Asia and EMEA as exchanges aggressively expand their offerings to support rising demand for exposure to these asset types.”