By Huw Jones
LONDON, April 16 (Reuters) - Pan-European stock exchange
Aquis said on Thursday it neared break-even in 2019,
although the coronavirus pandemic could slow the pace at which
it signs up new customers.
Aquis said it made an operating loss of 200,000 pounds
($249,500) in 2019, down 93% from 2018.
Market share in pan-European stocks trading rose to 4.6%
from 3.8%, and it ended the year with 11 million pounds in cash
and no debt, it said.
Aquis shares were up 6% at 362 pence at 1005 GMT,
Chief Executive Alasdair Haynes said the company will invest
a million pounds in hiring more technology staff this year and
therefore won't be profitable until 2021.
"We have to make a significant investment to gain more in
the long term and that went down pretty well in the market,"
Haynes said.
Aquis competes with pan-European exchanges like Cboe
, which has a market share of around 20%, and the London
Stock Exchange's Turquoise platform.
It added three clients to reach 30 in 2019, a slower rate of
increase than expected, with Haynes citing uncertainty over
Britain's departure from the European Union and its impact on
cross-border share trading.
"We were expecting to see substantial growth in clients this
year but the coronavirus could cause a slowdown," Haynes said.
Many trading houses are having to work off-site or from
home, with the lockdown in Britain expected to last until May at
least, making it harder to physically connect new customers.
The total number of clients is likely to hit 40 during 2020
out of a pool of 80 to 100 potential clients.
Haynes said he was sticking with a market share target of
10%, though declined to give a target deadline.
"It's going to take some time. We will reach 10%," Haynes
said.
Broker Liberum said the 2019 results were ahead of
expectations. "We note the significant increase in value traded
on the exchange in February and March. This will lead to clients
trading more and entering higher revenue tiers," it said.
Five EU countries renewed their bans on short-selling of
shares on Wednesday, with Italy already having extended its ban.
"It's a case of damned if you do and damned if you don't,"
Haynes said.
The bans have divided regulators with Britain and Germany
not following suit, and triggered opposition from hedge funds
and high-frequency traders (HFT) that favour short-selling
strategies.
"You cannot have companies go bust due to exceptional
circumstances," Haynes said.
Aquis does not allow HFT firms on its market and volumes
dipped in March when they hit record levels at other exchanges.
($1 = 0.8016 pounds)
(Reporting by Huw Jones; Editing by Kirsten Donovan)