Nordic and Baltic market operator OMX is establishing a fixed income division that will be headed by Erik Thedéen. The move comes as OMX reports a rise in third quarter sales and earnings, despite on-going uncertainty about the company's future ownership.
OMX says recent growth in fixed income markets has increased demand for clearing and electronic trading, as well as for higher levels of transparency.
In response, the exchange operator says it will house fixed income-related products and services in a single division as of 1 January 2008. The unit will be led by Thedéen who is currently OMX's head of public affairs.
"Recent structural growth has increased the demand for central counterparty clearing and electronic trading combined with rising demand for transparency on the world's fixed income markets. By strengthening our organisation, OMX creates stronger possibilities to develop the fixed income markets," says Jukka Ruuska, president of Nordic marketplaces at OMX.
OMX says in 2007 the average volume of fixed income derivatives cleared by OMX daily is approximately SKr100 billion, compared to around SKr30 billion three years ago. In the year to September 2007 revenues from fixed income-related products and services came in at SKr225m.
"Fixed income markets are an example of an important part of the financial market that often falls outside the traditional exchanges," says OMX president and CEO Magnus Böcker. "A certain measure of OMX's strategy is to reach beyond traditional equity markets, whether it might be commodities, fixed income or foreign exchange."
News of the fixed income initiative comes as OMX reports a 30% rise in earnings and a 23% increase in sales for the third quarter.
The exchange operator posted net income of SKr223m for the July-September third quarter, up from SKr171m in Q3 2006. Sales rose to Skr1.0bn in the period, up from Skr827m a year ago.
However OMX remained tight-lipped on progress of the $4.9bn takeover bid for its business from Nasdaq and Borse Dubai.
Since the bid was disclosed in September the state-owned Qatar Investment Authority (QIA) has bought up a 9.98% stake in the European market operator. But rumours have now surfaced that QIA is looking to exchange its 10% shareholding in OMX for a large part of Borse Dubai's stake in the LSE.
Böcker says the healthy set of Q3 results shows that "the turbulence surrounding OMX has not materially affected the company's daily operations".