WSJ: “Stock Exchanges Are Beating Other Stocks”

The WSJ noted that stock exchange stocks have been doing quite well. Yesterday, shares of Intercontinental Exchange (ICE) reached another new high.

“Exchanges are sitting in a very pretty place in a lot of ways,” said Brad Bailey, research director for capital markets at Celent in New York.

Analysts and investors attribute this performance to large swings in stock, bond and currency markets. After historically calm trading conditions last year, a pickup in volumes on higher volatility in 2018 has been a boon to exchanges and market makers—intermediaries who stand ready to buy or sell shares at any time.

“When volatility hits, volumes will be there,” Scott Hill, chief financial officer at ICE, said on an earnings call in October.

While many assets have fallen victim to slowing global growth, tighter monetary policy and rising trade tensions, exchanges and trading firms tend to benefit from the trading activity bred by rising uncertainty. Plus, a surge in initial public offerings has helped fuel these companies’ top and bottom lines.

“These businesses live off of trading and IPOs,” said Olivier d’Assier, head of applied research for the Asia-Pacific region at Axioma, which sells financial analytical tools to asset managers. “We’ve seen a lot of that.”

Posted by on December 4th, 2018 at 10:24 am


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