FRANKFURT, Feb 20 (Reuters) - Deutsche Boerse AG is focusing on growth initiatives in Asia and Latin America as the Frankfurt-based exchange operator charts a fresh direction after its failed attempt to buy NYSE Euronext.
“We have now closed the chapter on the prohibited merger and are instead focusing our resources on forward-looking growth projects,” Chief Executive Reto Francioni told the group’s annual press conference on Wednesday.
“Regarding the geographic expansion of our range of influence, the crucial growth in our markets will no longer be focused in Europe or North America in future, but in Asia and Latin America.”
In Asia, financial infrastructure had not kept pace with the dynamic growth in the economy, the Boerse said, adding it had created a team dedicated to pushing Asian expansion.
Deutsche Boerse will focus primarily on growing on its own, but would be open to joint ventures. The lack of suitable takeover targets in Asia made it unlikely the exchange will make any acquisitions, Francioni said.
Asian markets are evolving and are expected to open up further. Deutsche Boerse expects China’s currency, the renminbi, to become more internationalised within the next five years.
Deutsche Boerse Group, which includes post-trade processing and treasury arm Clearstream, already gets between 4 and 5 percent of revenue from Asia.
Francioni declined to be more specific about where his expansion initiatives were focused, but said a potential acquisition of Euronext is “not an issue.”
NYSE Euronext’s European stock market businesses is set to be split off following IntercontinentalExchange’s $8.2 billion takeover of Euronext’s parent NYSE Euronext.
The CEO said there were a few cautious signals in the banking sector that the downward spiral from a loss of confidence, refinancing bottlenecks and declines in earnings had been halted after intervention by central banks and governments.
The sustainability of this recovery would become clear during 2013, he said. And Deutsche Boerse sees an improvement in profitability levels in the longer run.
If markets continue to rally, full-year revenue might rise moderately to over 2 billion euros ($2.7 billion), while if the market environment remains unchanged, sales might remain at the level of the second half of 2012, Chief Financial Officer Gregor Pottmeyer said.