Core Points - The Hong Kong Stock Exchange (HKEX) announced an increase in the position limits for futures and options products related to the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Tech Index, effective from July 2, 2025 [1][2] - The new position limits will be 15,000 for the Hang Seng Index (up from 10,000), 25,000 for the Hang Seng China Enterprises Index (up from 12,000), and 30,000 for the Hang Seng Tech Index (up from 21,000) [2] - The Securities and Futures Commission of Hong Kong (SFC) published a consultation summary in April 2025, indicating strong market consensus on the need for increased position limits to enhance market liquidity and hedging efficiency [1][2][3] Market Development - HKEX has been working to develop Hong Kong's derivatives market into a global risk management center, having previously raised position limits for stock derivatives in December 2023 [3] - In 2024, the average daily trading volume of stock options in Hong Kong exceeded 733,000 contracts, representing an increase of nearly 20% compared to 2023, while the average open interest for stock options also rose by approximately 12% during the same period [3] Market Growth Factors - The SFC's earlier consultation document highlighted that the determination of position limits must consider market size and growth, noting significant growth in the Hong Kong stock market over the past decade, driven by an increase in the number of large-cap listings [6] - The market capitalization of the Hang Seng Index and Hang Seng China Enterprises Index increased by approximately 60% and 250%, respectively, over the past ten years, with average daily trading volumes for their constituent stocks rising by about 160% and 300% [6]

Core Viewpoint - The rise in trading volumes, driven by market volatility and product expansion, is expected to benefit major exchanges like CME Group and Intercontinental Exchange, while the focus on non-trading revenue streams adds dynamism to the industry [1][2]. Group 1: CME Group - CME Group is the largest futures exchange globally in terms of trading volume and notional value traded [3]. - The company is experiencing strong organic growth, benefiting from increased market volatility which drives higher trading activity and revenue from clearing and transaction fees [4]. - There is a notable rise in electronic trading volumes and involvement in crypto markets, supported by broader adoption of digital assets [5]. - CME's strategic investments are yielding solid returns, and its focus on cost efficiency is expanding margins [6]. - Financially, CME has consistently strong results, with free cash flow conversion rates exceeding 85% in recent quarters [7]. - However, CME faces concentration risk, with a significant portion of revenues from interest rate and equity products, and geographic concentration in North America [8]. - The company operates in a competitive environment, facing pressure from emerging crypto trading platforms and other trading venues, yet maintains a return on equity of 14%, above the industry average [9]. Group 2: Intercontinental Exchange (ICE) - ICE has transformed from a small start-up to a major player, managing risk and improving workflow efficiency with over 5,000 indices representing more than $1 trillion in benchmark assets [10]. - Revenue prospects for ICE appear strong, driven by global data services and index businesses, along with steady expansion in pricing and reference data offerings [11]. - The ongoing digital transformation in the U.S. residential mortgage industry is fueling ICE's growth, particularly through the integration of Ellie Mae into ICE Mortgage Technology [12]. - ICE's robust balance sheet is expected to support financial stability and long-term growth [13]. - The Zacks Consensus Estimate for ICE's 2025 revenues and EPS indicates a year-over-year increase of 7.1% and 13.8%, respectively [14][16]. - ICE's price-to-earnings multiple is at 24.26, above its five-year median of 21.97 [18]. Group 3: Comparative Analysis - CME is trading at a price-to-earnings multiple of 24.94, above its five-year median of 23.21 [18]. - Both CME and ICE have shown positive year-to-date stock performance, with CME gaining 21.3% and ICE gaining 17.2% [21]. - CME scores higher in return on equity compared to ICE, indicating better efficiency in generating profit from shareholders' equity [21].

Financial Data and Key Metrics Changes - In 2024, the company achieved record revenues of $9.3 billion, a 16% increase compared to the previous year, marking the strongest year in ICE's history [4] - Adjusted earnings per share reached a record high, contributing to the overall growth trajectory of the company [4] Business Line Data and Key Metrics Changes - The exchanges segment, including the New York Stock Exchange, saw net revenues grow by 12% year over year to a record $5 billion, driven primarily by the energy business, which generated $1.9 billion in total revenues, a 25% increase from the prior year [4] - The fixed income and data services segment also reported record revenues of $2.3 billion, with the fixed income data and analytics business growing 5% year over year to $1.2 billion [5] - Revenues from the mortgage technology segment totaled $2 billion, reflecting progress in digitizing the mortgage workflow [5] Market Data and Key Metrics Changes - The company noted an increase in open interest in the oil industry by 19%, with a significant rise of 18% in the Brent benchmark contract [32] - Open interest trends in natural gas showed a 4% increase globally, with Europe at 8% and Asia at 45%, indicating strong market participation [34] Company Strategy and Development Direction - The company is focused on innovating across asset classes to enhance efficiency and transparency for customers, aiming to deliver value to stockholders [6] - The strategy emphasizes diversification and positioning within industries undergoing digital transformations, which has historically led to consistent growth [4] Management's Comments on Operating Environment and Future Outlook - Management highlighted positive trends in the residential real estate market, noting improved inventory and slowing price growth, which may benefit homebuyers [31] - The energy sector is expected to see increased demand due to data centers and a shift towards natural gas as a transitional fuel, contributing to a favorable outlook for the company's energy trading and risk management platform [32][34] Other Important Information - The company successfully conducted its annual meeting virtually, allowing stockholders to participate and ask questions through a web portal [2][3] - The board of directors and management team were acknowledged for their efforts in achieving strong results and maintaining corporate governance [6] Q&A Session Summary Question: Trends in the residential real estate market - Management noted improving home inventory and slowing price growth, with the company outperforming the industry due to its focus on digitizing and automating lending practices [31] Question: Forecasts and trends for the energy industry - Management observed an increase in market participants in the energy sector, contributing to record volumes and revenues, with open interest in oil and natural gas showing significant growth [32][34]

Core Points - Euronext's Annual General Meeting (AGM) approved all resolutions except for the advisory vote [1] - The annual dividend of €2.90 per ordinary share will be paid on 28 May 2025, with the ex-dividend date on 26 May 2025 and record date on 27 May 2025 [1] Voting Items Summary - Proposal to adopt the 2024 remuneration report [3] - Proposal to adopt the 2024 financial statements [3] - Proposal to discharge the members of the Managing Board and Supervisory Board for their duties in 2024 [3] - Re-appointments and appointments of members to the Supervisory and Managing Boards [3] - Proposals to amend remuneration policies for both boards [3] - Proposal to appoint the external auditor [3] - Proposal regarding the cancellation of shares purchased under the share repurchase program [3] - Proposals to designate the Managing Board for issuing ordinary shares and acquiring shares [3] - Proposal to authorize the granting of rights to French beneficiaries for shares [3] Company Overview - Euronext is the leading European capital market infrastructure, covering the entire capital markets value chain [5] - As of March 2025, Euronext's regulated exchanges host nearly 1,800 listed issuers with a market capitalization of €6.3 trillion [6] - Euronext handles 25% of European lit equity trading and offers a diverse range of products including equities, FX, ETFs, bonds, derivatives, commodities, and indices [6]

Core Insights - Cboe Global Markets is expanding its Data Vantage business in the Asia Pacific region by hiring Junichi Nakagawa and Samuel Zou as Sales Directors, reflecting the increasing demand for market data and analytics from Asia Pacific investors [1][9] Group 1: Business Expansion - The new hires will focus on market data sales and analytics growth in Japan and Singapore, respectively, indicating a strategic move to enhance Cboe's presence in the region [1][4] - Cboe operates 27 markets across five asset classes globally, including leading equity trading venues in Australia and Japan, which supports its Data Vantage business [2][8] Group 2: Market Demand - In Q1 2025, 55% of Data Vantage's new data sales came from clients outside the U.S., showcasing the international expansion strategy and the growing interest from Asia Pacific investors [3] - Cboe's Data Vantage products are increasingly sought after by Asia Pacific investors looking for enhanced access to global markets, highlighting the region's significance for Cboe's growth [4][9] Group 3: Product Offerings - Cboe plans to offer 24-hour trading in U.S. equities five days a week to meet the rising demand from Asia Pacific investors, pending regulatory approvals [5] - The company has made its Global Indices Feed available on Snowflake Marketplace, providing a straightforward way for global customers to access high-quality market data [4]

Group 1 - CME Group reached a 52-week high of $286.48 on May 7, with shares closing at $284.82, reflecting a 22% year-to-date gain, outperforming peers Cboe Global Markets and Intercontinental Exchange, which gained 19.9% and 18.5% respectively [1][2] - CME Group is the largest futures exchange globally, with a market capitalization of $102.6 billion and an average trading volume of 2.6 million shares over the last three months [2][3] - The company's diverse portfolio in emerging markets, electronic trading growth, and strong global presence are expected to drive future growth [3][24] Group 2 - CME shares are trading above both the 50-day and 200-day moving averages, indicating a bullish trend [7] - The price-to-earnings ratio of CME Group is 25.33X, higher than the industry average of 24.55X, indicating a premium valuation [11][13] - Analysts project a potential downside of 4.6% based on the average price target of $270.39 per share [15] Group 3 - The Zacks Consensus Estimate for 2025 earnings is $11.11, reflecting an 8.3% year-over-year increase, with revenues expected to rise to $6.5 billion [17][18] - Return on equity for CME was 14%, slightly above the industry average of 13.9%, while return on invested capital (ROIC) was around 10% over the last few years, but only 0.6% in the trailing 12 months [21][22] - CME Group benefits from heightened market volatility, which increases trading activity and transaction fees, contributing significantly to revenue [24] Group 4 - The company is experiencing rising electronic trading activity and increased interest in crypto assets, positioning it well for future growth [25][29] - CME has a strong capital base supporting initiatives to expand its market data business and product range [27] - Despite concentration risk in Interest Rate and Equity products, CME's global presence and product portfolio are expected to drive growth [28][30]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $209 million, compared to $210 million in the prior year, indicating a slight decrease [28] - Commission revenue decreased by 2%, primarily due to lower fees per million and market share in U.S. Credit, partially offset by strong market volumes driven by increased volatility [28][32] - Services revenue increased by 7%, with Information Services revenue rising by 9% to $13 million, driven by new contracts [29] - Operating expenses increased by 2% to $120 million, reflecting cost discipline and lower variable costs [33] - Diluted earnings per share were reported at $0.40, or $1.87 per share excluding notable items [30] Business Line Data and Key Metrics Changes - Record U.S. Credit Average Daily Dollar (ADD) was $9 billion, up 2% [12] - International products saw record ADD of $6 billion, up 11% [12] - Municipal bonds experienced a significant increase in Average Daily Volume (ADV) of 42% [13] - Automation trade volumes reached a record of $110 billion, up 17% [14] - Open Trading ADV hit a record of $5 billion, an increase of 8% [15] Market Data and Key Metrics Changes - U.S. High Grade estimated market share increased to 20% in March, the highest since December 2023 [10] - U.S. High Grade market share was reported at 19.4%, up 120 basis points year-over-year [24] - Total trading ADV grew 68% year-over-year to a record $57 billion, with total credit ADV increasing by 32% to $18 billion [23] Company Strategy and Development Direction - The company is focusing on expanding its algo suite for rates and launching an enhanced Request for Quote (RFQ) solution [8][10] - The strategy includes diversifying product offerings and enhancing technology investments to drive growth in U.S. Credit market share [5][39] - The company plans to roll out a high-touch block trading solution and a new Midex solution to address dealer needs [44][22] Management Comments on Operating Environment and Future Outlook - Management noted that the current market environment is characterized by uncertainty, which is favorable for the business model [42] - There is an expectation of higher levels of volatility in the market, which could drive increased turnover in the bond market [43] - The company is optimistic about the growth opportunities presented by new product releases and the current market conditions [44][46] Other Important Information - The company expects to close the RFQ Hub transaction later in May, which will consolidate RFQ Hub into its financials [37] - The effective tax rate is expected to increase to 41% to 42% due to a new reserve for uncertain tax positions [36] Q&A Session Summary Question: Outlook for increased share gain moving forward - Management indicated that the current market environment is favorable for share gains, with expectations of continued volatility and liquidity needs from clients [42][43] Question: April market behavior and client share - Management observed sustained market velocity and heightened trading activity, even as volatility decreased from peak levels [50][51] Question: Fee capture in high grade - Management explained that increased portfolio trading and dealer-to-dealer business, which have lower capture rates, are impacting overall fee capture [56][60] Question: Strength of portfolio trading solution - Management highlighted enhancements in the portfolio trading solution and positive client feedback, indicating strong demand for analytics and data [66][68] Question: Rollout of X Pro into Europe - Management expressed optimism that the rollout of X Pro would accelerate portfolio trading share, as it has already captured significant market share in the U.S. [111]

Core Insights - CBOE Global Markets reported strong Q1 2025 earnings, demonstrating resilience during market volatility [1] Company Overview - CBOE Global Markets operates as an options exchange and clearing corporation with a global presence and various adjacent business segments [1]

Summary of Hong Kong Exchanges (0388.HK) 1Q25 Results Company Overview - **Company**: Hong Kong Exchanges and Clearing Limited (HKEX) - **Ticker**: 0388.HK Key Financial Highlights - **Earnings Per Share (EPS)**: Reported at HK$3.23, representing a 38% year-over-year (yoy) increase and 2% above Goldman Sachs estimates (GSe) [1][6] - **Revenue**: Total revenue was HK$6,857 million, slightly above GSe by 2%. Revenue excluding investment income was 6% below GSe [1][6] - **Net Profit After Tax (NPAT)**: Increased by 37% yoy to HK$4,077 million, 2% above GSe [1][6] - **EBITDA**: Reported at HK$5,254 million, 2% higher than GSe, with an EBITDA margin of 77% [6] - **Effective Tax Rate**: 16%, consistent with GSe [1][6] Revenue Breakdown - **Investment Income**: Approximately HK$1,361 million, 10% higher than expectations, driven by an increase in HK margin fund size [6] - **Trading Volumes**: - Cash equity Average Daily Turnover (ADT) increased by 144% yoy - Hong Kong derivatives Average Daily Volume (ADV) rose by 25% yoy - London Metal Exchange (LME) ADV increased by 6% yoy [6] - **Depository Fees**: Noted a decline, contributing to the revenue miss excluding investment income [6] Cost Analysis - **Operating Expenses (OPEX)**: Excluding depreciation and amortization (D&A), OPEX was 1% below GSe, with a 7% yoy growth [6] - **Staff Costs**: Decreased by 4% yoy, while non-staff costs surged by 31% yoy, primarily due to a HK$90 million fine paid to the FCA [6] Investment Outlook - **Rating**: Goldman Sachs maintains a "Buy" rating on HKEX with a target price of HK$378, implying a 12.7% upside from the current price of HK$335.40 [4][10] - **Risks**: Potential risks include increased competition from onshore capital markets, lower cash market velocity, fee pressure from reduced fees in China, and a sustained deflationary environment [9][10] Additional Insights - **Market Capitalization**: Approximately HK$425.2 billion (US$54.8 billion) [10] - **Dividend Yield**: Projected at 3.5% for the upcoming year [10] - **Future Earnings Projections**: Expected EPS growth to HK$10.32 by December 2024, with a P/E ratio forecasted at 25.4 [10] This summary encapsulates the key financial metrics, revenue breakdown, cost analysis, investment outlook, and additional insights regarding HKEX's performance in the first quarter of 2025.

Core Insights - CBOE Global reported revenue of $565.2 million for Q1 2025, a 12.6% year-over-year increase, with EPS of $2.50 compared to $2.15 a year ago, exceeding Zacks Consensus Estimates [1] - The company achieved a revenue surprise of +1.54% and an EPS surprise of +5.93% compared to analyst expectations [1] Financial Performance Metrics - Average Revenue Per Contract for Futures was $1.74, slightly below the $1.76 estimate [4] - Average Daily Volume for Multi-listed options was 13.41 million, exceeding the 12.99 million estimate [4] - Access and capacity fees generated $97.80 million, surpassing the $96.55 million estimate, reflecting an 8.6% year-over-year increase [4] - Market data fees totaled $77.80 million, above the $75.92 million estimate, with an 8.1% year-over-year increase [4] - Other revenue was $25 million, below the $28.23 million estimate, representing a -5.3% change year-over-year [4] - Net transaction and clearing fees reached $832.60 million, exceeding the $788.83 million estimate, with a 15.9% year-over-year increase [4] - Regulatory fees surged to $161.80 million, significantly above the $90.18 million estimate, marking a 222.3% year-over-year increase [4] Stock Performance - CBOE shares returned -2% over the past month, compared to a -0.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential outperformance in the near term [3]