TMX Group seeking data & analytics deals to build on expanded capabilities

By Reuters

<p><body> <p>By Nichola Saminather</p> <p><span class="caps">TORONTO</span> (Reuters) – <span class="caps">TMX</span> Group plans to further grow its data and analytics business with acquisitions that can help it build scale after a raft of deals in recent years has already expanded its capabilities in the space, its chief executive told Reuters.</p> <p>The operator of the Toronto stock exchange, Canada’s biggest, said this week it would acquire Tradesignal, a German provider of energy markets analysis tools. The acquisition was undertaken by Trayport, <span class="caps">TMX</span>’s European wholesale energy markets platform that it bought in 2017.</p> <p>Its global solutions, insights and analytics business is the biggest revenue contributor, and accounted for about 34% in the first quarter of 2021, a slight increase from a year ago.</p> <p>The growth of computer-driven trading has led to a surge in demand for financial data and information, with global exchanges rushing to add the capabilities. Early this year London Stock Exchange closed its $27 billion acquisition of financial data provider Refinitiv.</p> <p><span class="caps">TMX</span>, among the world’s top 10 stock exchange operators by market value, reported a 37% rise in first-quarter earnings this week driven by new listings and record equities trading volumes, but “you wouldn’t expect to see us investing to create more equity market share,” <span class="caps">CEO</span> John McKenzie said in an interview on Wednesday.</p> <p><span class="caps">TMX</span> is seeking to further expand services for issuers after the acquisition of <span class="caps">AST</span> Trust Company, which is expected to close in the third quarter, he said. He said <span class="caps">TMX</span>’s long-term plan is to secure revenues that are more recurring and subscription-based, and from more global sources.</p> <p>New listings growth was driven by exchange-traded funds, in particular cryptocurrency offerings, McKenzie said. Despite this, <span class="caps">TMX</span> won’t revisit plans for a digital currency brokerage that it announced in 2018 and abandoned a year later. </p> <p>“We didn’t see the institutional interest in it,” McKenzie said, adding <span class="caps">TMX</span> prefers to focus on cryptocurrency <span class="caps">ETF</span> offerings, including creating options and futures for these.</p> <p>While <span class="caps">TMX</span> would be interested in joining efforts by the Bank of Canada to introduce a cash-like digital currency, “we haven’t seen what market problem it’s solving yet,” McKenzie said.</p> <p/> <p> (Reporting By Nichola Saminather; Editing by David Gregorio)</p> </body></p>