NYSE Euronext Eyes New Sectors for Growth
NYSE Euronext signaled it would shift focus to faster-growing areas like supplying computer systems and information from trading, as the U.S. exchange looks to an independent future following the collapse of a takeover by Deutsche Boerse.
NYSE, whose $7.4 billion takeover by German peer Deutsche Boerse was scuppered last week, on Friday posted a 13 percent rise in fourth-quarter operating profit to $212 million, compared with a forecast for $208 million.
Despite challenging market conditions, our fourth-quarter results were solid with an increasing contribution from non-trading revenue sources and continued cost discipline, chief financial officer Michael Geltzeiler said.
Information and technology were the drivers behind the profit hike, with revenue in that unit up 11 percent to $127 million, compared with a 1 percent fall in futures trading and a 2 percent rise in share trading.
NYSE, like rivals Deutsche Boerse, the London Stock exchange and Nasdaq OMX ,has seen its core trading units squeezed by cheaper rivals in recent years.
This has prompted the world's top exchanges to reassess their role and look to non-core areas, such as supplying trading systems and information to clients, to drive growth.
NYSE chief executive Duncan Niederauer said after the Deutsche Boerse deal failed last week that five of NYSE Euronext's past six acquisitions were technology assets and he expected more of these deals.
I would not expect us, nor anyone else in the industry, to do a mega-merger any time soon, Niederauer said. Everyone is going to kind of take a pause and reassess the landscape.
The European Commission killed the NYSE-Boerse deal, which would have created the world's biggest stock exchange operator, saying the combined entity's near-monopoly would make it hard for new players to compete.
NYSE Euronext has also been seen by analysts as an obvious rival bidder for European clearing house LCH.Clearnet, which has been in exclusive sales talks with the London Stock Exchange since September.
NYSE was in talks about a possible joint bid for LCH with data vendor Markit but the plan was scrapped in the middle part of last year as the LSE emerged as the front-runner.
LCH.Clearnet chief executive Ian Axe said on Friday: We are willing to take calls but we are currently in negotiations with the LSE.
Geltzeiler said on Friday NYSE Euronext will detail its two-year growth plan at an investor day in April.
($1 = 0.7517 euro)
(Additional reporting by Kylie MacLellan; Editing by David Cowell and Dan Lalor)
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