Exchanges Weekly Review: IntercontinentalExchange, CME Group, NASDAQ

IntercontinentalExchange Group (NYSE:ICE), CME Group (NASDAQ:CME) and NASDAQ OMX Group (NASDAQ:NDAQ) released their monthly volume reports this week, with an improvement in trading volumes witnessed across cash equities and derivatives trading in the U.S. CME was the largest gainer, with average daily volumes rising across all asset classes including interest rate, equities, energy, commodities and, surprisingly, even foreign exchange derivatives. Similarly, the number of futures and options traded on ICE’s platforms rose both sequentially and year-on-year across all its platforms in the U.S, Canada and Europe. NASDAQ OMX also witnessed a growth in derivative trading volumes in the U.S. However, the number of derivative contracts and shares traded on its European platforms declined on a year-over-year basis. Here’s a quick roundup on the individual metrics and September performance for the exchange operators.

CME Group

CME Group (NASDAQ:CME) saw solid growth in trading volumes in September, with the company averaging over 15 million contracts traded per day during the month. This was a solid 17% improvement over the previous month and the year ago period. Volumes rose on a y-o-y basis for all individual asset classes including interest rate (+23%), foreign exchange (+40%), commodities and metals (+9%), equities (+6%) and energy derivatives (+3%). ^[1] Interest rate derivatives contributed to nearly half the total trade volumes for CME in 2013, and has increased to nearly 53% year-to-date. This figure could further rise in the coming months as the traders begin to speculate when the Fed will start raising interest rates in 2015. Additionally, foreign exchange (FX) trading picked up after it had been subdued for the first eight months of 2014, with average daily contracts traded on CME’s platform down by over 25% on a year-on-year basis. The number of FX derivatives traded per day crossed the 1 million mark during September for the first time since November 2012.

• Trefis has an $80 price estimate for CME’s stock, implying a market cap of $26.8 billion. This is slightly lower than the current market price which rose slightly during the week.
• We estimate the company’s 2014 revenues to be around $2.9 billion and earnings per share of $3.05 in 2014, compared to a consensus of $3.20 according to Reuters.

See our full analysis for CME Group

NASDAQ OMX

NASDAQ OMX Group (NASDAQ:NDAQ) witnessed an improvement in trading activity in the U.S, with the number of shares traded  increasing by 12% y-o-y to over 25 billion shares traded in September. Similarly, the number of equity options traded in the U.S. rose by 10% over the year ago period to 86 million contracts in September. ^[2] However, equity and derivatives trading volumes in Europe continued to be suppressed. The number of options and futures traded on NASDAQ’s European platforms were over 30% lower than the prior year period at 7.8 million traded contracts in September.

• Trefis has a $43 price estimate for NASDAQ OMX’s stock, translating into a $7.4 billion market cap. This is slightly higher than the market price, which fell slightly during the week.

See our full analysis for NASDAQ OMX

IntercontinentalExchange Group

Average daily trade volumes for IntercontinentalExchange Group (NYSE:ICE) were higher than the year ago period in the month of September. The number of options and futures traded on ICE’s U.S. platform rose by 40% sequentially and 5% y-o-y to 32.4 million contracts in September. Similarly, a total of 27.4 million futures and options were traded on ICE Europe, up from 25.3 million in August and 26.3 million in September last year. ^[3]

• Trefis has a $225 price estimate for IntercontinentalExchange Group, translating into a $25.9 billion market cap. Our price estimate is slightly higher than the current market price, which rose by 3-4% during the week.

See Our Full Analysis For IntercontinentalExchange Group

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1. CME Group Monthly Trade Metrics For September, CME Group Investor Relations, October 2014 [↩]
2. NASDAQ OMX Monthly Trade Metrics For September,NASDAQ OMX  Investor Relations, October 2014 [↩]
3. IntercontinentalExchange Group Monthly Volumes For September, ICE Group Investor Relations, September 2014 [↩]