Charles Li

The Hong Kong Exchange’s $37 billion offer to buy the London Stock Exchange Group highlights the exchange’s desire to build out its data business, which makes up only a small portion of its revenue compared with its peers.
Even though HKEX runs on an operating margin of over 70%, market data fees represent only a small percentage of its revenue.
LSE’s information services business, meanwhile, is its largest, making up nearly half of the London-based exchange’s revenue.
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Selling data is big business for exchanges, and the Hong Kong Exchange wants in on the party.

Despite seeing a record 26% increase in profits in 2018, HKEX continues to miss out on a major part of most exchanges’ business models: selling data. But the trading venue’s $37 billion bid to acquire the London Stock Exchange Group, or LSE, on Wednesday shows how it’s looking to go all in on selling information.

“I think it is really a transaction focused on the data side of things,” Octavio Marenzi, the CEO of the consultancy Opimas, told Business Insider, noting the exchange’s desire to expand its footprint in the market.

HKEX has proved to be a unique case in the world …read more


Source:: Businessinsider – Finance

      

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