Moscow Exchange (MOEX), the prime Russian trading venue, today released its financial results for the year ending 31 December 2015, showing very impressive growth considering the sad state of the Russian economy. The firm says higher trading volumes on the FX, bonds and money markets, as well as “increased interest income coupled with strict cost control”, are behind its record financial results.
MOEX’s net income increased 74.1% YoY to RUB 27.9 billion and operating income increased 51.3% YoY to RUB 46.0 billion. EBITDA increased 68.9% YoY to RUB 36.52 billion while operating expenses grew by 8.7% YoY to RUB 11.3 billion, well below Russia’s average rate of inflation in 2015.
Alexander Afanasiev, Chief Executive Officer of Moscow Exchange, commented: “Russia and the majority of other developing markets faced a number of serious challenges in 2015. These included negative economic performance and outflows of institutional money. In Russia this situation was complicated further by limitations on new capital markets borrowings.
Despite all this, Moscow Exchange delivered record operational and financial results, which is a strong endorsement of the the company’s business model and of the strategy adopted in 2015. It also underscores the significant demand for the products we offer.
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We are pleased to note the growing share of domestic retail investors in the structure of on-exchange trading. Potential demand from Russia’s retail market represents a great long-term growth opportunity for MOEX. International investors and traders, meanwhile, remain very active participants in our markets. We continue to focus both on growing the domestic investor base and also promoting the Russian stock market and local issuers in international capital markets,” he concluded.
Fee and commission income from the FX Market increased 27.0% YoY to RUB 4.3 billion. Trading volumes on the FX Market totaled RUB 310.8 trillion, up 36.0% YoY. The exchange adds that due to elevated FX rate volatility, spot trading volumes rose 32.8% YoY, while swap trading volumes increased 37.6% YoY on the back of continued demand for liquidity-management products. MOEX also successfully attracted domestic retail investors, with 88,000 individual investment accounts opened during 2015 (total 103,262 as of 1 March 2016) and significant growth in the number of individual traders on the FX Market (up 89% YoY) and derivatives market (up 31% YoY).
Evgeny Fetisov, Chief Financial Officer of Moscow Exchange, added: “2015 was a very successful year for Moscow Exchange. We continued to see volume growth across most asset classes, and launched new products and services to meet evolving customer needs. We benefited from a high interest rate environment in Russia, which had a positive effect on our interest income. The greatest contributions to the growth of our commission income came from the FX and Money markets as well as from depositary services. Overall, fee and commission income set a new all-time record for the full year. We remain committed to maintaining strict control over expenses, and were able to keep costs growth at below the rate of inflation for yet another year.
Our investment case remains intact. We continue to grow our diversified business and return capital to shareholders by maintaining a high dividend payout. Today, Moscow Exchange has one of the broadest investor bases among Russian issuers and a free float of around 57%, the highest in the Russian market.”