Clearstream and commodities help Deutsche Boerse in Q3

Clearstream and commodities help Deutsche Boerse in Q3

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Deutsche Boerse remains on track to hit its full-year financial targets after the exchange posted earnings growth in its third quarter.

Net revenue rose by 1% to €558.5m ($608) between July and September resulting in a pre-tax profit of €258m for the German group, which is hoping to secure approvals for its merger with the London Stock Exchange.

Gregor Pottmeyer, Deutsche Boerse's chief financial officer, reaffirmed full-year expectations said the results would have been stronger had it not been for a “weaker market environment” in Q3.

Uncertainly from the Brexit vote hampered trading volumes over the period while lower index levels – especially in the German blue-chip DAX index – hit revenues in the cash market business.

Meanwhile the persistent low interest rate environment in Europe negatively impacted its interest rate derivatives division Eurex.

Elsewhere, international business for Clearstream - the group’s central securities depository (CSD) - was positive and there were solid numbers from commodities subsidiary European Energy Exchange (EEX).

“During the third quarter, we were able to compensate for the weaker market environment through growth areas such as commodities and Clearstream’s international business and to increase net revenue overall,” said an official statement.

The group sold International Securities Exchange (ISE) during the second quarter of 2016 and offloaded around one third of its stake in BATS Global Markets this week for around $86m.

Now executives at Deutsche Boerse are focused on securing approval for the group's merger with the London Stock Exchange.

The company detailed €9.2m worth of expenses relating to the tie-up in Q3.

The merger, which will create a powerhouse of trading in stocks, bonds and derivatives and post-trade services, is still subject to a number of closing conditions.

These include merger control clearance by the EU Commission as well as approval by financial, securities and other regulatory authorities.

A final decision by the EU Commission isn’t expected until early 2017. 

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