Moscow Exchange, or Moskovskaya Birzha OAO (MCX:MOEX) has announced its financial results under International Financial Reporting Standards (IFRS) for the second quarter 2016. Earnings growth was supported by an increase in fee and commission income from all trading markets across the Exchange’s diversified business, particularly the Derivatives, Fixed Income and Money Markets.
Key financial highlights for 2Q 2016
- Operating income increased 6.2% YoY to RUB 10.81 bln
- Fee and commission income increased 13.3% YoY to RUB 4.87 bln
- EBITDA increased 6.6% YoY, reaching RUB 8.47 bln; the EBITDA margin was 78.4%
- Operating expenses grew by 7.2% YoY
- Net profit grew by 6.8% YoY to RUB 6.41 bln; basic EPS increased by 5.9% to RUB 2.86
Key corporate highlights for 2Q 2016
- New Money Market products launched: shares became eligible for the general collateral certificate (GCC) repo pool and a separate pool was created for OFZs, in addition to the GC Bonds pool launched in February 2016. The new pools are expected to significantly expand liquidity management opportunities for market participants and to boost trading volumes.
- Moscow Exchange introduced direct market access to the Money Market for corporate clients through M-deposits, which allow corporate customers to manage their liquidity position via on-exchange auction technology.
- NCC Clearing Bank introduced collateral for stress as an additional layer of its central counterparty (CCP) safeguard structure. This move brought the CCP’s operations in line with international best practices.
- MOEX expanded its relationships with CQG and IHS Markit to make access to MOEX’s markets easier for international traders. CQG is a leading global provider of trading solutions and IHS Markit provides post-trade infrastructure services in FX that complement MOEX’s products.
- MOEX became the first Russian financial institution to join the HyperLedger Project, a collaboration of global financial and IT companies aimed at advancing blockchain technologies.
Events occuring after the reporting date
- MOEX launched new deliverable futures contracts on USD/RUB, EUR/RUB and CNY/RUB, as well as a new currency pair CHF/RUB.
- The Emerging Markets Trading Association (EMTA) and CME Group started using Moscow Exchange’s USD/RUB FX fixing as the major settlement rate for rouble derivatives. This fixing complies with IOSCO principles and was approved by the Central Bank of Russia.
- Moscow Exchange completed the first stage of moving its infrastructure to a new Tier III data centre, DataSpace1.
- NSD launched Corporate Information Center, a single source for corporate data in Russia.
- MOEX called an EGM for 2 September 2016 to vote on the consolidation of its 100%-owned subsidiaries CJSC MICEX Stock Exchange and MB Technologies. The restructuring will optimise the Group”s corporate structure, streamline customer relationships with Group companies and reduce costs both for customers and for the Exchange.
Alexander Afanasiev, MOEx
Alexander Afanasiev, Chief Executive Officer of Moscow Exchange, said:
These strong results reflect our ongoing work to enhance our range of products by offering new instruments and services. Thanks to these efforts, even in an environment of decreased volatility across the major asset classes and declining trading volumes on many other exchanges globally, Moscow Exchange’s volumes, and thus our fee and commission income, are growing.
Going forward, our key priorities remain expanding opportunities for investors to place funds and manage liquidity, boosting the appeal and reliability of Russia’s financial infrastructure, attracting new investors and issuers and increasing the number of bond and stock placements.”
Evgeny Fetisov, Chief Financial Officer of Moscow Exchange, added:
We are pleased to report that our fee and commission income increased year-on-year across all markets in the second quarter. We saw pronounced growth in fee and commission income from derivatives (+56.1%), money market products (+16.5%) and bonds (+37.7%). Achieving faster growth in fee and commission income vs. interest income is one of Moscow Exchange’s strategic priorities. Through well thought-out and conservative management of assets, we were able to increase interest income, despite lower interest rates. The Company’s costs are primarily fixed, and they grew roughly in line with inflation. The EBITDA margin remained strong at 78.4%, and our financial policy continues to be based on ensuring stable cash flow and providing returns to our shareholders in the form of dividends.”
FINANCIAL HIGHLIGHTS
