11.12.2018

Euronext To Launch New Strategy

11.12.2018
Shanny Basar

Euronext is going to reveal a new strategic plan next year as the pan-European exchange has made acquisitions and entered new asset classes since launching “agility for growth” three years ago.

Stéphane Boujnah, Euronext

Stéphane Boujnah, chief executive and and chairman of the managing board of Euronext, was on the exchange’s third quarter results call today. He said: “The perimeter of the company has changed with new asset classes and businesses. We will be presenting a new strategic plan by May or June next year.”

He continued that Euronext will give its annual update on agility for growth during the fourth quarter results next February.

“The fourth quarter has started well due to an increase in volatility,” said Boujnah. “The ETF Access multilateral trading facility will go live next year and we will also be focusing on fixed income, currencies and commodities, market data and indices.”

Boujnah added that Synapse MTF, a venue for fixed income trading, and the family of indices in partnership with Morningstar are no longer expected to contribute €20m ($22.5m) of incremental revenue by 2019. However, seven other organic growth initiatives have generated €55m of incremental revenue at a margin of 50%.

Acquisitions

There have been press reports that Euronext was in discussions to buy Markitserv, the derivatives processing arm of IHS Markit. Boujnah said Euronext does not comment on market rumours.

“We have a disciplined acquisition plan,” he added. “We will not pay for an asset that does not meet our value ambitions.”

In March this year Euronext completed the acquisition of the Irish Stock Exchange, now Euronext Dublin.

Georgio Modica, chief financial officer of Euronext, said on the call that Dublin’s cash market is due to migrate to Optiq, Euronext’s proprietary trading platform, in February next year subject to regulatory approval.

“This will allow Euronext Dublin trading members and investors to benefit from access to trading across all cash equity asset classes available on Euronext`s pan-European exchanges,” Modica added. “Euronext and Deutsche Börse will work together actively to ensure a smooth transition.”

The exchange has signed an agreement for the early termination of the trading services contract provided by Deutsche Börse, initially due on December 2021.

There have been reports that settlement and custody may move from Dublin after the UK leaves the European Union.

Boujnah said: “We are in a comprehensive dialogue with market participants on settlement and custody to find most appropriate solution after Brexit. Our aim is to maximise continuity and minimise disruption and we will make a public announcement shortly.”

 

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