August 21, 2019 / 5:34 AM / 2 months ago

SIX Swiss Exchange eyes H2 boost from EU bourse row

ZURICH, Aug 21 (Reuters) - SIX Swiss Exchange could get another boost in the second half from trading volumes flowing its way amid a bourse battle between Switzerland and the European Union over a stalled partnership treaty, it said on Wednesday.

Swiss stock volumes soared last month to their highest in years as a ban on trading on euro zone platforms forced market participants onto the domestic exchange, upending trade flows in Europe while the row between Brussels and Bern rumbled on.

Brussels blocked EU-based investors from trading on Swiss bourses from July as conflict escalated over the treaty, which would see non-EU member Switzerland routinely adopt EU single market rules.

The Swiss government, or Federal Council, retaliated by banning EU venues from hosting Swiss stock trading.

“There are certain indications that the (EU situation) potentially has a positive effect on operating income as well as profit in the second half of the year due to the associated contingent measures by the Federal Council,” it said.

It said EU trading volumes of Swiss equities had smoothly transferred onto SIX, but reiterated that it would prefer a more lasting political solution.

“Effective open markets and legal certainty continue to be the highest priority and of the utmost importance to SIX in order to be able to serve best the interests of banks, issuers and investors,” the group owned by around 130 banks said.

First-half earnings before interest, tax, depreciation and amortisation (EBITDA) fell 30% to 99.9 million Swiss francs ($102 million) as revenue slipped 4% due to price cuts.

Operating expenses rose 5% amid spending on new products, M&A activity and regulatory projects. Net profit fell 57% to 32.4 million but was down 1% excluding the impact of its $2.75 billion sale of its payments business to Worldline last year.

SIX’s 27% stake in Worldline as part of that deal has risen in value to 3.5 billion Swiss francs from 2.5 billion at the signing of the transaction, it said.

$1 = 0.9793 Swiss francs Reporting by Michael Shields

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