ICE Launches INR Futures - Analyst Blog
27 Novembre 2012 - 5:27PM
Zacks
IntercontinentalExchange Inc. (ICE) unveiled
two new foreign exchange (FX) futures contracts in Indian Rupee
(INR) and Brazilian Real, in an attempt to take an extra step of
developing business into emerging nations. These new futures will
begin trading from January 28, 2013 onwards.
These non-deliverable forward currencies will be settled in cash
and will be hedged against the US dollar. IntercontinentalExchange
is the first US stock exchange to offer futures contract in Indian
Rupee. Thus far, the company offers more than 60 FX futures
contracts. During the second quarter of 2012, the company also
included non-deliverable forward FX over-the-counter (OTC)
contracts to its clearing services officially.
The company is strategizing to attain a strong foothold in the
emerging markets and has achieved a competitive leverage on
demonstrating immense growth potential in its futures and OTC
market. The company is well positioned to drive its operating
leveragethrough these organic efforts and maintain its competitive
edge against arch-rivals such as CME Group Inc.
(CME) and NYSE Euronext Inc. (NYX). Its volumes
and margin are also expected for grow once the global markets
stabilize, as more futures and OTC contracts are now
exchange-traded and cleared.
Moreover, introduction of new products is crucial for the core
growth of the company, which has been following the ongoing weak
industry trends. This was even reflected in its third quarter
results, wherein both top- and bottom-line lagged the year-ago
comparisons due to severe decline in transaction and clearing fee
revenues driven by weak performances from the OTC segment and
credit default swap (CDS) business. However, some cushion was
provided by capital efficiency, strict expense control, lower tax
rate and growth in the company’s market data and other
businesses.
Currently, the Zacks Consensus Estimate for the fourth quarter
operating earnings is pegged at $1.83 per share, which would climb
about 3.7% from the year-ago quarter. Over the last 30 days, 12 out
of 16 analysts covering the stock have reduced their estimates for
the fourth quarter of 2012, while 3 upward revisions were
witnessed. However, earnings estimate of $7.60 per share for 2012
exhibit stability with an expected year-over-year growth of
7.4%.
We retain our long term Neutral recommendation on
IntercontinentalExchange. It also has a quantitative Zacks #3 Rank
that translates into a short-term Hold rating.
CME GROUP INC (CME): Free Stock Analysis Report
INTERCONTINENTL (ICE): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis Report
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