EM Exchanges: Brazilian exchange B3 stands out

Financials

Galliano's Financials Research

Victor Galliano sticks with B3 as his core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing. He keeps Hong Kong Exchange as a buy, with its high share of post-trade revenues; its shares have been highly volatile, but represent relative value combined with growth potential. Philippine Stock Exchange and BSE are new additions to Victor’s coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value but lacking a re-rating catalyst.

- 24 January, 2025

Japan Exchange (8697)

Financials

Galliano's Financials Research

JPX is Victor Galliano’s 2024 high conviction buy amongst the global exchanges, for its attractive valuations, as well as its potential for increased market activity and big data revenue growth. He believes that JPX is the exception to the rule that DM exchanges need to diversify their revenue bases, as it is under less de-regulatory pressure. Victor sticks with Hong Kong Exchange as his deep value pick, as well as Deutsche Boerse, but remains negative on Coinbase (he thinks we are close to exhausting the positive surprises and the fundamentals remain challenging).

- 22 December, 2023

London Stock Exchange (LSEG LN) & Deutsche Boerse (DB1 GR)

Financials

Galliano's Financials Research

Victor Galliano sticks with his core theme for global exchanges of growing post-trading revenues, as well as capitalising on “big data” in financial transactions and data services, as we move into 2023. He identifies four relative value opportunities. In addition to the two mentioned above, HKEx and MexBolsa feature positively multiple times in Victor’s value screens and they are all diversifying revenue streams. He sticks with Coinbase as the exchange to avoid. Its revenue streams are heavily exposed to low volumes of crypto transactions and recent events highlight counterparty risk.

- 06 January, 2023