JPX Overview Of Earnings For 2Q FY2014

Atsushi Saito, JPX Group CEO -

Atsushi Saito, JPX Group CEO –

I. Overview of Earnings for 2Q FY2014 (April 1–September 30, 2014)

Highlights

  • Although revenue declined significantly year-on-year due to a sharp fall in trading from last year’s record levels, steady progress on cost reductions contributed to attaining 65% of the net income forecast.
  • Forecast assumptions were revised in consideration of 1H earnings and market conditions.

Average Daily Trading Volume

  • Average daily trading value in cash equities was about JPY 2.5 trillion, down 24% from last year’s record levels but surpassing forecast assumptions.
  • Derivatives trading volumes grew on greater volatility from August but remained lower year-on-year.

Operating Revenue

  • Trading participant fees and income from securities settlement decreased from the previous year due to declines in cash and derivatives trading.
  • Listing fees increased due to an increase in annual listing fees mainly from growth in listed company market capitalization.

Operating Expenses

  • System maintenance/operation costs and depreciation declined due to system integration for cash equities and derivatives.

II. Business Developments

Cash Equities

  • Cash equity trading hovered around a daily average of approx. JPY 2.5 trillion. The ETF/ETN market grew past 180 issues with trading value also remaining strong.
  • The number of IPOs increased to 27 from 18 for the previous year.
  • Assets under management linked to the JPX-Nikkei 400 surpassed JPY 290 billion.
  • Since August, meetings of a council of experts have been held regularly toward drafting the Corporate Governance Code by next year’s AGM season.

Derivatives

  • Close to 70% share of the Nikkei 225 futures market was maintained amid slower trading from shrinking global volatility.
  • On September 24, 2014, a basic agreement on derivatives system service provision was concluded between OSE and TOCOM.
  • Since the derivatives market integration in March, mini-TOPIX Futures trading volume has hovered close to record highs.
  • JPX-Nikkei 400 Futures are scheduled to be launched on November 25.
  • Nikkei 225 Weekly Options are scheduled to be launched by the end of May 2015.

Expansion of Exchange Business Fields

  • Outstanding obligation assumption for yen-denominated interest rate swaps (IRS) has increased steadily and surpassed JPY 1,000 trillion. Client clearing has also grown to 6 companies.

About the Author

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