Free report

Moscow Exchange presented its Strategy 2024. Over the past five years, MOEX has successfully executed its strategy focused on infrastructure unification, product range diversification, processes optimization, and higher penetration of the exchange services. As a result, the Moscow Exchange Group represents an integrated platform for trading equity, bonds, derivatives, Repo, FX, commodities, with incorporated Clearing and Depository connected to Euroclear/Clearstream. We update our view based on new Strategy 2024 targets.

Date: 5/11/2019

Moscow Exchange (MOEX) reported 4Q18 and FY18 results. The company reported strong trading volume growth in 2018, including 17.9% YoY growth of equity market volumes and 28.1% YoY growth of bond market trading volumes excluding overnight bonds. Average assets under custody increased by 16.4% YoY in FY18 to RUB42,797.8bn. In this report, we update our forecasts and target price.

Moscow Exchange (MOEX) reported 4Q17 and FY17 results. The MOEX’s operating income was RUB38.5bn in FY17, down 12% YoY from RUB43.6bn, driven by the decreasing interest and finance income. The structure of operating income changed in favor of the fee and commission (F&C) income 55/45 in FY17 from 46/54 ratio a year ago, in line with expectations. F&C income rose 7.1% YoY to RUB21.2bn in FY17. The F&C income surged 33.7% YoY on Fixed Income market, 1.4% YoY in Depositary and Settlement Services, and 16.8% YoY on the Money Market in FY17. The F&C income on FX market and Derivatives market fell 11.9% and 2% YoY respectively in FY17. Largest contributors to F&C income were Money Market (27%), Depository & Settlement Services (20%), and FX Market (18%) in FY17.

Moscow Exchange met investors and analysis in London during the Moscow Exchange forum. Earlier, the company released 3Q17 financials, which came close to our forecast and valuation.  In 9M17, MOEX reported 5% YoY fee and commission income growth and 32% YoY decline of interest income.  The result of 3Q17 included better figures and supported our full year estimates of total operating income at RUB39.9bn.  The profit before tax declined 19% YoY in 3Q17 and by 22% in 9M17 against 18% decline in our model for FY17. The net income fell 18% YoY in 3Q17 and by 22% in 9M17 that is close to our 18% net income drop estimate for FY17.  The November trading update presented lower derivatives volumes (down 27% YoY in Jan-Nov 2017) and lower than expected of balances of market participants (15% YoY reduction in Nov 2017).

Moscow Exchange (MOEX) was among the top performers on the Russian market in 2016. Moscow Exchange Group benefited from increased FX market volatility, growing money, bond and derivative markets, infrastructure upgrades and new product developments, as well as from elevated interest rates during 2014-2016. The ruble depreciation in 2014 and the collapse in oil prices were the main external drivers for the Group’s performance, apart from infrastructure upgrades.