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IHS Markit Inks MoC with Hundsun for Bookbuilding Solutions

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IHS Markit Ltd. (INFO - Free Report) announced yesterday that it has inscribed a memorandum of collaboration (MoC) with Hundsun Technologies, a leading provider for Fintech solution in China.

Hundsun provides a range of technologies to support brokerage and trading, middle and back office as well as trustee operations.

The duo intends to jointly develop bookbuilding solutions for bond syndication in mainland China.

Putting Ipreo to Good Use

IHS Markit closed Ipreo acquisition in August 2018 and it seems to be wasting no time in putting it to good use. The collaboration will see Hundsun using Ipreo's electronic bookbuilding technology, which will develop a China bond market-tailored underwriting and issue net, connect Chinese investment bank and institutional investors to the global issue net and support overseas direct investment.

Shares of IHS Markit have moved up 6.2% in a year’s time compared with the industry’s rise of 2.7%.

The Bigger Picture

It seems that through the collaboration, IHS Markit is trying to tap into China’s potentially massive bond market, the third largest in the world. Hundsun stated in a press release that issue size of all kind of bonds in China surpassed $6.4 trillion (RMB 43 trillion) in 2018 and foreign inflows to the bond market reached about $100 billion (RMB 673.7 billion).

The move is likely to benefit IHS Markit’s Financial Services segment that performed well in the last reported quarter. Revenues in the segment totaled $408.8 million, up 27% on a year-over-year basis and recurring revenues rose 7% organically.

Zacks Rank & Stocks to Consider

Currently, IHS Markit carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader Business Services sector are General Finance Corporation , Omnicom Group Inc. (OMC - Free Report) and Paychex, Inc. (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for General Finance, Omnicom and Paychex is 11%, 6.9% and 8.8%, respectively.

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