HKEX has proved to be extremely efficient, running on a high operating margin, but its data business is only a small portion of its revenue.
, market data fees represented only 6.5% of the Hong Kong Exchange's total revenue. That's a paltry amount when compared with others in the space, most notably its acquisition target LSE., the venue reported 43.3% of its total revenue came from information services, which includes traditional market data as well as its indexes business via FTSE Russell.
"Data is also part of HKEX's ambitions," Li wrote."We intend to inject new energy and vigor into the global financial industry by leveraging the massive amounts of data generated from Asian countries and, in particular, the highly digitized economy of China." To be clear, the deal faces several hurdles to getting approved. Regulators, who have been hesitant in the past to approve cross-border exchange acquisitions, seem likely to be the biggest impediment.
"Most exchanges are looked at as national treasures, and they don't want to give them up to people outside the country," Larry Tabb, the founder and research chairman of the Tabb Group, told Business Insider."It has seemed like the day of these big, global exchange mergers has passed, but we'll see."
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