Exchange Operators Notes: Energy, Commodities, Equities Remain Strong For CME, ICE, NASDAQ
Global exchange operators IntercontinentalExchange Group (NYSE:ICE), CME Group (NASDAQ:CME) and NASDAQ OMX Group (NASDAQ:NDAQ) witnessed mixed results in September in terms of trade volumes . The companies released their volume metrics for September recently, reporting a rise in trade volumes across equities and commodities and energy based derivatives. Both ICE and CME reported subdued volumes for derivative trading for financial products through the month.
The stocks of NASDAQ and ICE rose by 2-4% through the week, while CME’s stock price fell by about 3%. Here’s a quick roundup on the individual metrics and August performances for the exchange operators.
CME Group
CME Group (NASDAQ:CME) saw solid growth in trading volumes for equity indexes, commodities, metals and energy derivatives, while FX and interest rate derivative volumes subsided from mid-year highs. The average daily volume (ADV) for energy derivatives was about 20% higher y-o-y through the June quarter at 1.7 million contracts per day. The trading activity for energy derivatives in 2015 thus far is attributable to volatility in oil prices complemented by the launch of European natural gas contracts on CME Europe, in addition to the existing rise in trading volumes of energy contracts in December 2014. [1] Energy derivative trade volume remained high through September at almost 2 million contracts traded per day, which was 26% higher than the prior year period. The company witnessed high FX trading volumes through Q2 at 903,000 trades per day, which was about 43% higher than the prior year period. The number of FX contracts traded was up by 33% y-o-y t0 890,000 trades per day in August. This subsided to about 855,000 trades per day in September – only 7% higher on a y-o-y basis. After a slow start to the year with low trade volumes for interest rate derivatives, trading activity picked up in Q2. Subsequently, CME registered an average of 7.9 million interest rate contracts traded per day through August, up by 8% annually. This fell to 6.6 million contracts per day through September, a 7 % annual decline. Combined overall volumes for CME during the month were about 7% higher than the prior year period at 14.4 million contracts traded per day. [2]
- Trefis has an $87 price estimate for CME’s stock, implying a market cap of about $29 billion. The Trefis price estimate is about in line with the current market price.
See our full analysis for CME Group
IntercontinentalExchange Group
Similar to CME’s trade volumes, IntercontinentalExchange Group (NYSE:ICE) continued to observe high trade volumes for agricultural commodities and energy derivatives, while volumes of interest rate and FX products was subdued after picking up in the last few months. The average daily volume (ADV) for oil derivatives through September was up by 12% y-o-y to 1.3 million contracts traded per day. [3] Similarly, the combined ADV for all energy products and commodities was up by about 3% over the year-ago period to 2.7 million trades per day. However, the ADV for interest rate derivatives was 22% lower than the prior year period at 1.3 million contracts traded per day
- Trefis has a $222 price estimate for IntercontinentalExchange Group, translating into a $25 billion market cap. The Trefis price estimate is slightly below the current market price.
See Our Full Analysis For IntercontinentalExchange Group
NASDAQ OMX Group
NASDAQ OMX Group (NASDAQ:NDAQ) observed mixed results for cash equity trading and derivatives trading during the month of September. The company reported a fall in derivatives trading volumes in the U.S, with the number of equity options traded down by about 15% both annually and sequentially to 74 million contracts traded in September. On the other hand, derivatives trading volumes in Europe continued to impress. The number of options and futures traded on NASDAQ’s European platforms were about 6% higher than the prior year period at 8.3 million traded contracts in September. Cash equity trade volumes in the U.S. through Q2 were about 5% higher than the comparable prior year period at a total of 76.6 billion shares traded. The number of shares traded in the U.S. through August picked up significantly to over 31 billion during the month, which was 47% higher than prior year levels. The trend continued in September with the number of shares traded staying 17% higher than prior year levels at 29.5 billion shares. [4]
- Trefis has a $46 price estimate for NASDAQ OMX’s stock, translating into a $7.7 billion market cap. The Trefis price estimate implies a discount of around 10% to the current market price.
See our full analysis for NASDAQ OMX
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More Trefis Researc
- CME Group Announces the Launch of a Suite of European Natural Gas Contracts on CME Europe, Market Watch, December 2014 [↩]
- CME Group Monthly Trade Metrics For September, CME Group Investor Relations, October 2015 [↩]
- IntercontinentalExchange Group Monthly Volumes For September, ICE Group Investor Relations, October 2015 [↩]
- NASDAQ OMX Monthly Trade Metrics For September, NASDAQ OMX Investor Relations, October 2015 [↩]