Update: Q2 Exchange Data Revenues Rise, Despite Mixed Overall Financials

In Europe, Deutsche Börse recently reported quarterly revenues of €488.4 million ($655.6 million) in the second quarter of 2014─down 2 percent year-on-year-citing low equity market volatility and interest rates. However, the exchange's Market Data + Services segment saw a 4 percent year-on-year increase to €95.4 million ($128 million), reflecting considerable revenue growth from its Stoxx index subsidiary. The index unit's revenues rose from €18.1 million ($24.3 million) in Q2 last year to €20.7 million in Q2 this year as a result of investors increasingly moving to passively managed financial products, such as exchange-traded funds.

The London Stock Exchange also posted healthy increases in market data sales on the back of its proposed acquisition of Russell Investments, with information services growing 5 percent to £88 million ($148.2 million) in Q2 as a result of growth in the exchange's FTSE index business. The increase in data sales was in line with the LSE's overall increase in total quarterly revenues, which jumped 20 percent year-on-year to £299.9 million ($505 million).

The Warsaw Stock Exchange Group reported smaller increases in data sales for Q2, posting a 12 percent rise in information services revenues from PLN (Polish zloty) 8.6 million ($2.7 million) to PLN 9.6 million ($3.1 million) in Q2 this year─equating to 13.8 percent of total exchange revenue, compared to comprising 10.8 percent of total revenue last year. In Q2, the exchange posted total revenue of PLN 69.3 million ($22.3 million), up 7.3 percent on a yearly basis, as a result of a 65.2 percent spike in its commodities trading market, mainly due to a 56.7 percent year-on-year increase in trading of electricity and property rights.

Euronext's revenues from market data and indexes jumped 16.4 percent to €23.5 million ($31.4 million) in Q2 after a slight decrease in the number of data subscriptions was offset by the introduction of new derivatives data fees on following its separation from Intercontinental Exchange-owned Liffe, as well as by changes in fees for cash and reference data products. Total revenue increased 5.2 percent to €116.3 million ($155.52 million) for the quarter, driven by strong activity in the exchange's listing business and healthy volumes on cash trading.

Outside of Europe, Euronext's former owner Intercontinental Exchange─which spun off the European exchange group after acquiring NYSE Euronext─reported Q2 market data revenues of $96 million, up from $40 million in the same quarter last year, due to increased demand driven by regulatory reform. Consolidated Q2 net revenues for the exchange as a whole rose to $750 million from $372 the year before, with increases in clearing revenues offsetting volumes negatively impacted by low volatility.

CME Group also posted gains in market data revenue, with the segment jumping to $89.6 million from $79.4 million the previous year. However, CME's total revenues fell by more than 10 percent from $816.1 million in Q2 2013 to $732 million this year as a consequence of low levels of volatility.

Nasdaq OMX reported revenues of $123 million from information services, up $16 million from the second quarter of 2013. Market data revenues rose $12 million over Q2 last year to $101 million, due to growth in Nasdaq Basic, the inclusion of market data revenues from fixed income platform eSpeed, which Nasdaq acquired from interdealer broker BGC Partners, and a $3 million increase in audit collections. Meanwhile, index licensing and services revenues jumped $4 million to $22 million over the quarter as a result of higher assets under management and more licensed exchange-traded products. The exchange saw total Q2 net revenues jump 16 percent year-over-year to $523 million as a result of acquisitions and organic growth.

CBOE Holdings posted Q2 operating revenue of $143.9 million, down 5 percent from $150.8 million last year as a result of lower transaction fee revenue and $0.7 million in regulatory fees, though market data fees rose 36 percent from $5.7 million to $7.8 million over the same period, with the exchange citing increased demand for market data on its VIX volatility indexes, an increase in the number of market data subscribers, and a higher share (24.4 percent in Q2 of 2014 compared to 20.9 percent in Q2 last year) of revenue from the Options Price Reporting Authority's consolidated tape of US options market data─although these gains were slightly offset by a $200,000 increase in royalty fees, which included an increase in fees associated with market data.

North of the border, TMX Group posted a 9 percent revenue jump from information services to C$47.7 million ($43.5 million) in Q2, mainly due to higher revenues from under-reported use of real-time quotes in previous periods, currency fluctuations, adn increased revenues from datafeeds, co-location, and its TMX Atrium network subsidiary. TMX also posted a 1 percent increase in the number of professional market data subscribers to Toronto Stock Exchange and TSX Venture Exchange products to 116,040 users, up from 115,253 in Q2 last year. The exchange posted flat overall revenues of C$182.3 million ($166.2 million) for Q@, as gains from information services were offset by lower trading and clearing revenues from cash and derivatives markets, and by a decrease in technology services revenue due to the discontinuation of clearing and depository services.

Like CBOE, the Japan Exchange Group was also battling sliding revenues, with total operating revenue for the first quarter of its financial year ended June 30 falling by 31 percent from ¥36.1 billion ($352 million) in the previous year to ¥24.8 billion ($241.8 million) as a result of light trading, including a drop in information services revenue of 1 percent to just over ¥4 billion ($39.3 million), though co-location and proximity usage fees rose 13 percent in the same period to ¥687 million ($6.7 million).

Also in Asia, though with different fortunes, the Singapore Exchange saw its fourth-quarter revenues from market data and connectivity rise to S$ (Singapore dollars) 19 million ($15.20 million) from $18 million ($14.4 million) in the same period last year. Data revenue rose 4 percent to $77 million for the full year as a result of increased market data usage and growth of SGX's co-location and network services business. Meanwhile, total revenues for the quarter were down 4 percent year-on-year to $686.9 million ($549.4 million), dragged down by an 18 percent drop in its securities trading business.

Finally, Hong Kong Exchanges and Clearing reported that in the six months ended June 30, market data revenues rose by just over 3 percent to HK$382 million ($49.3 million), while HKEx's overall revenues for the period rose 4 percent to HK$ 4,621 million ($596.25 million) overall, boosted by increases in non-trading income, in particular listing-related fees, hosting fees and investment income.

HKEx's market data revenues include an 8 percent year-on-year rise to HK$215 million ($27.7 million) in its cash market segment due to the introduction of new datafeeds connected to the launch of the exchange's Orion Market Data Platform in the second half of 2013, and as a result of increased demand for non-display data services, as well as a 2 percent rise to HK$90 million ($11.6 million) in its commodities segment, offset by a 7 percent decline in data revenues in the exchange's equity and financial derivatives segment to HK$77 million ($9.9 million).