Nasdaq To Upgrade Hong Kong Exchanges' Technological Systems

Nasdaq, Inc. (NASDAQ:NDAQ) and Hong Kong Exchanges and Clearing Limited recently extended and strengthened their alliance with a new agreement. Under the accord, Nasdaq will upgrade the technological infrastructure of Hong Kong’s main derivatives market, including trading, clearing and real-time risk management technologies. This apart, their alliance will be extended by another five years.

Per the agreement, Hong Kong Exchanges and Clearing will receive a new multi-asset trading technology engine (Nasdaq Multi Matching Engine), a multi-asset derivatives clearing engine, as well as a real-time risk management solution (Nasdaq Clearing Engine and Nasdaq Real-Time Risk) from Nasdaq. The upgrade is expected to be completed by the second half of the next year.

Hong Kong Exchanges and Clearing has been leveraging Nasdaq’s technology to enhance its performances. The upgrade will hence ensure better and smooth functioning by the Asian securities exchange.

Nasdaq has grown meaningfully over the years through a number of strategic deals to expand its footprint. Nasdaq’s organic growth has been aided by its strategy of accelerating its non-transaction revenue base, which includes market technology, listing and information revenues. Management's medium-term outlook calls for mid-single digit growth over the next three to five years, raising optimism about the company’s prospects. The Zacks Consensus Estimate for first-quarter 2017 is pegged at $1.06 on revenues of $599 million, which translates to a year-over-year increase of 12.2% for the top line and 16% for the bottom line. However, our proven model cannot conclusively state if the company will beat earnings when Nasdaq report first-quarter results on Apr 26, before the market opens. This is because the company has a Zacks Rank #3 (Hold) but an Earnings ESP of -0.94%.

Year to date, Nasdaq’s shares have gained 3.34%, underperforming the 6.02% increase for the Zacks categorized Securities Exchanges industry. Nonetheless, the stock has been witnessing upward revisions in estimates over the last seven days.

Stocks to Consider

Some better-ranked stocks from the finance sector are CBOE Holdings Inc. (NASDAQ:CBOE) , progressive Corp (NYSE:PGR) and American Financial Group, Inc. (NYSE:AFG) .

American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 8.31% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. The stock sports a Zacks Rank #1. Shares of the company gained 11.30% year to date.

CBOE Holdings is a leading derivative exchange in the U.S. Shares of the company gained 10.34% year to date. The stock holds a Zacks Rank #2.

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