MOEX Q1 Net Profit up 11% QoQ, FX Volumes Totaled $1.57 Billion (RUB 53.8 Trillion)

Moscow Exchange results for the first quarter show FX trading volumes rose 95.4% YoY to RUB 53.8 trillion, Spot trading

moex1Russia-based Stock Market and Derivatives Market operator Moscow Exchange (MOEX) today reported its financial results for Q1 2014, with strong earnings growth driven by fees and commissions from increased trading volumes across markets, particularly the Equity and FX Markets, according to the official press release.

The reports were compiled based on International Financial Reporting Standards (IFRS) and showed that total trading volumes across all markets increased 43.69% year-over-year, when compared to Q1 2013, reaching RUB 120.47 trillion. Total operating income increased 18% YoY to RUB 6.51 billion, and EBITDA also rose 14.6% over that time period to RUB 4.43 billion.

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Foreign Exchange Market Fee & commission income from the FX Market at MOEX increased 64.2% YoY to RUB 799.5 million, while trading volumes rose 95.4% YoY to RUB 53.8 trillion. Spot trading volumes grew 60.8% YoY, while swap trading volumes outperformed with 121.6% YoY growth, driven by continued solid demand from customers for liquidity management products. The exchange also unified the risk management systems of the FX and precious metals markets during the quarter.

MOEX Q1 2014 [Source Moscow Exchange]
MOEX Q1 2014 [Source Moscow Exchange]
Net profit for the exchange totaled RUB 3.17 billion up 23.72% YoY, with earnings per share (EPS) reported at RUB 1.45.

Commenting in the official press release, Alexander Afanasiev, Chief Executive Officer of Moscow Exchange said,”After an outstanding 2013, which was marked by a number of major transformational reforms, Moscow Exchange started 2014 with strong growth of operating and financial results. A volatility spike led to higher trading volumes across most of our markets – Equities, FX, Money Market and Derivatives, which showed significant growth during the first quarter.”

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Alexander Afanasiev, CEO, MOEX
Alexander Afanasiev, CEO, MOEX

Mr. Afanasiev added, “The quarter also saw the first serious market stress-test of our upgraded infrastructure, and I’m pleased to say that we successfully passed through a period of market turbulence. Our risk-management systems worked well, with the Central Counterparty functioning in the T+2 settlement regime, and we have continued to serve our customers by providing uninterrupted access to trading of different asset classes.”

MOEX said key corporate highlights included:

  • Moscow Exchange completed the buyback and subsequently retired quasi-treasury shares from its MICEX Finance subsidiary. This increased existing shareholders’ proportional ownership of the company’s equity and their return on capital (ROC), as well as strengthened corporate governance by preventing voting with these shares.
  • Moscow Exchange sold its stake in electronic state procurement platform MICEX IT. This move was in line with the strategy of optimizing the group’s structure through the disposal of non-core assets.
  • Moscow Exchange hosted the 2014 Moscow Exchange Forum, one of the largest annual conferences of the Russian financial markets community, which brought together more than 1,000 participants.
  • International central securities depositories Euroclear and Clearstream launched settlement of Russian corporate bonds via their direct links to the Russian CSD, the National Settlement Depository (NSD), a Moscow Exchange subsidiary.

In addition to other reported areas of the Exchange’s business lines, its Derivatives Market reported figures included fee & commission income which increased 20.7% YoY to RUB 433.7 mln. While derivatives market trading volumes increased 25.6% YoY to RUB 14.5 trn (340.3 mln contracts), open interest rose 27.5% YoY to 12.32 mln contracts at the end of 1Q14. Fees and commissions’ growth was mainly driven by increased volatility and robust activity on spot markets over the quarter. Derivatives on FX grew by 72% YoY and comprised 43% of total trading volume on the derivatives market, while derivatives on indices comprised a further 49%.

MOEX also signed a memorandum on cooperation with Korea Exchange in the field of financial markets, and trading began in an ETF on the MSCI China index, as well as the start of publication of indicative swap rates which has increased the relevance and transparency of FX market data, according to a description in the press release.

The Exchange’s cash position totaled RUB 48.1 bln as of 31 March, 2014, and MOEX said it had no outstanding debt as of the end of Q1 2014. Forex Magnates has just covered April’s volumes reported by the exchange, which saw a drop over March as the start of second quarter began.

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