CME Group (CME.O) is in strong position to make acquisitions, armed with low debt and robust earnings, Chief Executive Officer Terry Duffy told Reuters, even as the world's largest derivatives exchange operator faces rising competition.
Exchanges have been consolidating over the years and some have expanded beyond market-sensitive businesses like trading to pursue more predictable revenue.
CME, however, has registered three consecutive years of revenue growth as demand for hedging increased because of market volatility.
Andrew Bond, senior fintech analyst at Rosenblatt Securities, has a sell rating on CME, saying "competitive threats are increasing to their business".
In particular, BGC Group (BGC.O) plans to launch Fenics Markets Xchange (FMX), a futures exchange for interest rate derivatives, pending regulatory approval.