- Brexit trading led to increased profit at Deutsche Boerse
- German exchange planning merger with London Stock Exchange
- Majority of shareholders support the merger
- Moving HQ to post-Brexit London remains controversial
London Stock Exchange and Deutsche Boerse plan a merger, but moving the headquarter
to the UK is a big issue since it has become clear that a Brexit is to take place. Photo: iStock
By Clemens Bomsdorf
Probably only few companies exist which illustrate the potential economic and political effects of the Brexit
as clearly as Deutsche Boerse. While its business – in the short run at least – profited from increased trading activity, the decision to move its headquarters to London after a merger with the London Stock Exchange
remains politically controversial.
Source: Deutsche Boerse
In Q2 Deutsche Boerse profited from increased trading linked to the referendum at the end of June. "As expected, trading volumes on the cash and derivatives markets increased around the date of the UK referendum, culminating in very high quantities on the day post-referendum", says the firm's Q2 report
, disclosed yesterday evening,
The Eurex segment saw a particular boost, increasing its revenue by 20% and its adjusted EBIT by 34%. "The positive development was mainly due to the slightly higher market volatility, which increased the hedging needs of market participants, and the marked increase in contracts traded around the date of the referendum in the United Kingdom,” reported Deutsche Boerse.
In total, reported net revenue rose by 20% in Q2 compared to the same period a year earlier and net profit was up 9% (see first table for details).
As discussed in an article yesterday, the hitherto Frankfurt-based German exchange wants to merge with the London Stock Exchange and move its headquarters to the British capital. Following the Brexit vote and the prospect of the UK leaving the EU, this is controversial in Germany and has been criticised by influential economists as well as politicians (see the previous article for details
However, also when presenting its first quarterly report following the Brexit vote yesterday Deutsche Boerse did not distant itself from the decision to move the new entity's HQ to London.
As such, we can expect the controversy to continue despite the good financial result.
— Edited by Michael McKenna