THE 'SPOTIFY OF STOCK EXCHANGES' COUNTS THE COST OF BREXIT

March 20, 2019

Revenues at Aquis double during its first year as a listed company, but losses widen.

Aquis, dubbed the Spotify of stock exchanges, doubled revenues in its first year as a listed company, but warned that Brexit will increase its costs as losses widened.

The exchange, founded in 2013 by Alasdair Haynes, former boss of ITG Europe and Chi-X, said revenues rose to £4m in 2018 from £2m the year before. Its share of pan-European equities continuous trading increased to 3.8% from 1.9% over the course of the year, according to a March 20 results statement.

Aquis has completed a milestone year, during which it raised £32m in an initial public offering on Aim, the London stock market, and earned the backing of heavyweight shareholders including XTX Markets, the trading firm, Rathbones, the investment manager, and Schroders and Invesco, the asset managers.

The exchange has drawn comparisons with Spotify because of its subscription model, which contrasts with the traditional exchange approach of charging a percentage of trading volume. It offers banks and fund managers an alternative place to trade shares across Europe, rivalling the likes of Cboe, Turquoise and many national exchanges.

Aquis’s annual losses widened to £3.4m from £3m on the back of £1m of exceptional costs associated with its IPO. That pushed expenses up to £7.1m from £5.3m.

Ben Williams, an analyst at Liberum, Aquis’s broker, said revenues were 19% ahead of his expectations, while costs were in line. As well as winning subscribers for its exchange, Aquis has expanded into selling trading and surveillance technology.

However, Aquis chair Nicola Beattie warned that Brexit will increase costs by about 5%, including those linked to the regulatory approval needed to open new offices in Paris. Aquis is monitoring Brexit developments and could move trading of EU stocks to the French capital.

In an interview, Haynes said Aquis’s venue in Paris technically went live today, March 20, with 12 pilot stocks available for trading to prove the exchange is ready for Brexit and any migration from London.

Haynes said: “Will stocks move over from the UK to Paris? I don’t think anybody is in a position to say that yet. Certain Brexit scenarios could hurt Aquis.”

By Samuel Agini, Financial News