MOEX Sees Rising Income, Profit in Q2, Fueled by Fee, Commission Growth

Figures were more upbeat over a YoY basis in Q2 2016, highlighting a positive quarter for the exchange.

Moscow Exchange (MOEX) has reported financial results for the second quarter 2016, which saw an uptick in key areas including income, fueled in part by fees and commissions from its diversified business, per a MOEX statement.

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Looking at its income for Q2 2016, MOEX experienced an upbeat quarter, having yielded an operating income of RUB 10.8 billion – this was reflective of a gain of 6.3% YoY from RUB 10.2 billion in Q2 2015. Looking at a different measure however, operating income did decline over a quarterly basis, stumbling -7.8% QoQ from RUB 11.7 billion in Q1 2016.

These results follow in line with MOEX’s recent volumes woes, which had orchestrated a general and sustained decline since March 2016. Over any basis, the largest driver of its operating income was a growth in fees and commissions, which swelled 13.3% YoY to RUB 4.9 billion in Q2 2016, up from RUB 4.3 billion in Q2 2015. Fees and commissions still declined QoQ, though only by a margin of -2.8% from Q1 2016.

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Mixed Bag

Operating profit was another mixed bag, depending on what timeframe was being analyzed. In Q2 2016, MOEX reported RUB 7.9 billion, jumping 5.8% YoY from RUB 7.5 billion in Q2 2016 – this was again tempered by a QoQ decline of -8.2% QoQ from RUB 8.6 billion in Q1 2016.

Another area that bears notice moving forward is MOEX’s jump in operating expenses. This can be largely pegged on a new product lineup that had expanded the group’s offering, ranging from money market products to new capabilities for the exchange. The figure itself moved higher by 7.2% YoY to RUB 2.8 billion in Q2 2016 from RUB 2.6 billion in Q2 2015.

A closer look at MOEX’s foreign exchange business also showed a healthy growth. Fee and commission income from the FX market yielded RUB 1.03 billion in Q2 2016, edging higher by 2.6% YoY from Q2 2015. Moreover, trading volumes also grew by 6.3% YoY to RUB 79.41 trillion over this same period. By extension trading volumes in spot and swap orchestrated an ascension of 16.1% and 2.4% YoY respectively in Q2 2016 from the same period in 2015.

Alexander Afanasiev, Chief Executive Officer (CEO) of Moscow Exchange, in a recent statement on the financials: “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,” he added.

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