External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

Multi Commodity Exchange of India / Equity Bottom-Up

Multi Commodity Exchange of India (MCX IN)

NSE and BSE volumes were soft in April-21 but picked up strongly in May and June-21. BSE maintained its cash/derivative market share in 1QFY22, which stood at 7.1/6.5% -20/+20bps QoQ. StAR MF and INX continue to register strong growth. BSE is expected to report 2.5% QoQ growth in revenue and an EBITDA margin of 29% (-127 bps QoQ). We increase our core target multiple to 15x vs 10x earlier, which is still at a ~50% discount to peers. Our target price of INR 1,075 is based on 15x core June-23 PAT + net cash + CDSL stake.<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

NSE and BSE volumes were soft in April-21 but picked up strongly in May and June-21. BSE maintained its cash/derivative market share in 1QFY22, which stood at 7.1/6.5% -20/+20bps QoQ. StAR MF and INX continue to register strong growth. BSE is expected to report 2.5% QoQ growth in revenue and an EBITDA margin of 29% (-127 bps QoQ). We increase our core target multiple to 15x vs 10x earlier, which is still at a ~50% discount to peers. Our target price of INR 1,075 is based on 15x core June-23 PAT + net cash + CDSL stake.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Exchanges, Staffing and Internet (1QFY22E Results Preview): Mixed bag

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

4QFY21 saw further normalization in bullion volumes, largely driven by 11%/15% sequential decline in gold/silver volumes. This was partially offset by a 56% sequential increase in crude volumes on the reversal of the higher margin requirements imposed earlier. Overall ADT dipped 3% QoQ, leading to 4% sequential decline in revenue. The impact on volumes during the quarter was the result of the second phase of implementation of new margin rules (50% of peak margin requirement) from 1st March.<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

4QFY21 saw further normalization in bullion volumes, largely driven by 11%/15% sequential decline in gold/silver volumes. This was partially offset by a 56% sequential increase in crude volumes on the reversal of the higher margin requirements imposed earlier. Overall ADT dipped 3% QoQ, leading to 4% sequential decline in revenue. The impact on volumes during the quarter was the result of the second phase of implementation of new margin rules (50% of peak margin requirement) from 1st March.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Near-term blip; long-term opportunities intact

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

ADTO in commodity futures on the exchange declined 13% to Rs 31823 crore in Q4FY21, due to increase in regulatory requirement of upfront margin partially offset by higher gold priced compared to last year. Markets share in commodity futures space has remained strong at 96.04% in FY21. Number of unique customers increased from 51.5 lakh in Q3FY21 to 60.2 lakh in Q4FY21 while authorised person count was at 52777. Decline in ADTO (13% YoY) was partially offset by healthy realisation keeping moderation in operational revenue at ~8% YoY to Rs 97 crore.<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

ADTO in commodity futures on the exchange declined 13% to Rs 31823 crore in Q4FY21, due to increase in regulatory requirement of upfront margin partially offset by higher gold priced compared to last year. Markets share in commodity futures space has remained strong at 96.04% in FY21. Number of unique customers increased from 51.5 lakh in Q3FY21 to 60.2 lakh in Q4FY21 while authorised person count was at 52777. Decline in ADTO (13% YoY) was partially offset by healthy realisation keeping moderation in operational revenue at ~8% YoY to Rs 97 crore.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Hong Kong Exchanges and Clearing / Equity Bottom-Up

Hong Kong Exchanges and Clearing (388 HK)

*Mainland Chinese Stock Exchange Powerhouse: According to Reuters, mainland China is contemplating the establishment of a new stock exchange to attract overseas-listed firms (including Hong Kong) which will bolster Shanghai’s status as a global financial center; and  *Here Comes The Pain Trade: If mainland China is successful this time around (and we think that they will be), it is probably pretty fair to say that the HKEX/mainland China growth story will have come to an abrupt end. In terms of where we are with valuation, HKEX’s P/E has exploded in the face of weaker volumes on the expectation of future US ADR listings. The increase in the stamp duty to cover Hong Kong’s tax shortfall only adds to the misery that HKEX may encounter.

*Mainland Chinese Stock Exchange Powerhouse: According to Reuters, mainland China is contemplating the establishment of a new stock exchange to attract overseas-listed firms (including Hong Kong) which will bolster Shanghai’s status as a global financial center; and  *Here Comes The Pain Trade: If mainland China is successful this time around (and we think that they will be), it is probably pretty fair to say that the HKEX/mainland China growth story will have come to an abrupt end. In terms of where we are with valuation, HKEX’s P/E has exploded in the face of weaker volumes on the expectation of future US ADR listings. The increase in the stamp duty to cover Hong Kong’s tax shortfall only adds to the misery that HKEX may encounter.

Hong Kong Exchanges & Clearing – Building The HKEX Coffin

*Solid Quarter: Hong Kong Exchanges &amp; Clearing (388.HK) [HKEX] reported 3Q20 earnings of HKD 3.3 bn, improving HKD 376 mn (12.7%) linked quarter. Results were even more impressive when we exclude investment income (declined HKD 206 mn or 23.2% linked quarter) – increasing HKD 582 mn (28.0%) to HKD 2.7 bn; and** Peak Value: So much value has been derived on hope for the shares of HKEx, which included that on: southbound connect, futures markets,  structural reforms, and the change in CEO. As such, we have witnessed HKEx’s 2020 share performance of 44.4% that has resulted in a global exchange leading valuation of 10.4x P/BV.

*Solid Quarter: Hong Kong Exchanges &amp; Clearing (388.HK) [HKEX] reported 3Q20 earnings of HKD 3.3 bn, improving HKD 376 mn (12.7%) linked quarter. Results were even more impressive when we exclude investment income (declined HKD 206 mn or 23.2% linked quarter) – increasing HKD 582 mn (28.0%) to HKD 2.7 bn; and** Peak Value: So much value has been derived on hope for the shares of HKEx, which included that on: southbound connect, futures markets,  structural reforms, and the change in CEO. As such, we have witnessed HKEx’s 2020 share performance of 44.4% that has resulted in a global exchange leading valuation of 10.4x P/BV.

Hong Kong Exchanges & Clearing – Strong Quarter, But Can It Continue?

India

Multi Commodity Exchange of India (MCX) is India's largest commodity derivatives exchange, offering an online platform for trading commodity futures and options across segments such as bullion, base metals, energy, and agricultural commodities. The company also provides data feed subscriptions and membership services. It was founded in 2003 and is headquartered in Mumbai, India.

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Multi Commodity Exchange of India (MCX IN)

Exchanges, Staffing and Internet (1QFY22E Results Preview): Mixed bag

NSE and BSE volumes were soft in April-21 but picked up strongly in May and June-21. BSE maintained its cash/derivative market share in 1QFY22,...

HDFC Securities

Near-term blip; long-term opportunities intact

4QFY21 saw further normalization in bullion volumes, largely driven by 11%/15% sequential decline in gold/silver volumes. This was partially offset...

Motilal Oswal