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‘Historic’ trading volumes drive Nasdaq’s profit higher

FILE PHOTO: The Nasdaq logo is displayed at the Nasdaq Market site in New York, U.S., May 2, 2019. REUTERS/Brendan McDermid

(Reuters) – Transatlantic exchange operator Nasdaq Inc (NDAQ.O) reported a 23{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} rise in adjusted quarterly profit on Wednesday, benefiting from the coronavirus-fueled market volatility that led to a surge in trading volumes in March.

Global financial markets were ravaged by the rapid spread of the pandemic in the first quarter. But the market volatility benefited exchange operators such as Nasdaq, which make most of their money from clearing and settling trades.

The company’s adjusted net income rose to $251 million, or $1.50 per share, in the first quarter ended March 31, from $204 million, or $1.22 per share, a year earlier.

Revenue at it market services unit – the biggest business – jumped 21{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, boosted by “historic” trading volumes, mainly in the second half of the first quarter.

The unit oversees transactions, clearing and settlements.

Nasdaq’s non-trading businesses, which provide a broad range of news and information used by traders, reported a 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} rise in revenue.

Since taking the helm of the company in 2017, chief executive officer Adena Friedman has expanded Nasdaq’s focus beyond traditional exchange functions to higher-growth opportunities in technology and analytics, and sold off less-profitable units.

Overall net revenue rose 11{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $701 million during the quarter.

Nasdaq also said it refinanced certain bonds to lower interest costs and eliminated near-term bond maturities, as well as boosted liquidity by drawing from its existing revolving credit facility to ensure short-term funding needs were insulated from volatile money markets.

Reporting by Noor Zainab Hussain; Additional reporting by Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli

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