At this morning’s annual general meeting of the Luxembourg Stock Exchange (LuxSE), the stock exchange published its financial results for the financial year ending on 31 December 2022, reporting record profits.
LuxSE reported operational revenues of EUR 38.2 million for the financial year 2022, which represents an operational revenue growth of 0.3% compared to the previous year. The stock exchange also reported an exceptional net profit of EUR 170 million. The net profit was generated by the sale of LuxSE’s former wholly-owned subsidiary Fundsquare to the UK-based fund data and technology company FE fundinfo, which was completed in September 2022. As part of this transaction, LuxSE acquired a stake in the FE fundinfo Group.
“The exceptional financial results for 2022 are mainly driven by FE fundinfo’s acquisition of Fundsquare. Over the years, as part of the LuxSE Group, Fundsquare grew into a high-performing company with a unique position in the fund industry. In an environment shaped by increasing competition and market consolidation, Fundsquare needed to be part of a bigger group to reach its full potential and FE fundinfo has the resources and network to make sure Fundsquare can expand internationally. As a shareholder of FE fundinfo, LuxSE remains involved in the combined group,” commented Julie Becker, CEO of LuxSE.
LuxSE will invest part of this exceptional profit in the implementation of its new strategic roadmap, the LuxSE 2026 strategy, which was defined at the end of 2022.
“Our vision is to become the world’s leading sustainable finance and information solution provider, offering market participants a broad array of solutions going beyond traditional financial products and services. The strategy centres on accelerating growth in our core businesses of listing, trading and data, while capitalising on LuxSE’s expertise in ESG and experience in DLT, and exploring new domains such as private markets. We will focus on organic growth but also explore opportunities for partnerships, joint ventures or acquisitions,” stated Alain Kinsch, President of the Board of Directors of LuxSE.
Stable activity despite challenging market conditions
Against a backdrop of high inflation, increased interest rates, geopolitical tensions and a significant drop in overall global bond issuances in 2022, LuxSE managed to defend its position as the leading listing venue for international bond issuance in 2022 with a 29% market share. In the course of 2022, LuxSE welcomed 12,346 new securities, down 3% compared to new listings in 2021. At the end of 2022, LuxSE reported a total of 40,674 listed securities, up 7% year over year.
In terms of sustainable finance, LGX displayed 535 new green, social, sustainability and sustainability-linked bonds in 2022, which represents a 4% decrease compared to new displays in 2021. In total, these new sustainable bonds raised EUR 207 billion for investments with positive green and social outcomes around the world. This represents a decline of 16% year over year, reflecting the decrease in sustainable debt issuances globally in 2022, which however translated in an increased market share for LuxSE. At year end, LGX encompassed close to 1,600 sustainable bonds, raising a total of EUR 830 billion for sustainable investment projects. 2022 also saw the addition of 106 new Article 8 and Article 9 fund share classes on LGX, representing an increase of 31% year over year.
Gender finance, emerging markets and sustainability data
Through the Luxembourg Green Exchange (LGX), LuxSE continued to accelerate the sustainable finance agenda throughout last year. In 2022, LuxSE made advancing gender finance a key priority. Joining forces with UN Women, LuxSE worked to raise awareness of gender finance and started flagging all sustainable bonds displayed on LGX that contribute to gender quality objectives, to make it easier for investors to identify such bonds.
Fostering sustainable finance initiatives in emerging markets was another key priority for LuxSE in 2022. The stock exchange entered into MoUs with its counterparts in Cabo Verde, Rwanda, Vietnam and the West-African regional exchange BRVM with a specific focus on sustainable finance activities.
LuxSE also continued to increase the scope of the structured sustainable bond data included in the LGX DataHub, offering sustainability data on 10,000 listed sustainable bonds in early 2023. As part of its strategic focus on sustainability data, LuxSE also acquired a minority stake in UK-based data provider Util in 2022.
Focus on trading and technology
In 2022, LuxSE welcomed two new trading members, BPER Bank Luxembourg and CICC UK, and established a new and more efficient post-trade model through its partnership with BFF bank.
In terms of its focus on technology, LuxSE started admitting security tokens to its Securities Official List in January 2022 as the first exchange in the European Union. The exchange also completed the migration of its technical infrastructure to the Cloud in November, as the first financial institution in Luxembourg.