NYSE Euronext eyes new sectors for growth

Fri Feb 10, 2012 7:02am EST
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By Luke Jeffs and Kylie MacLellan

LONDON (Reuters) - NYSE Euronext NYX.N 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 (DB1Gn.DE: Quote) 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 (LSE.L: Quote) and Nasdaq OMX (NDAQ.O: Quote),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."   Continued...

<p>Detail seen at the NYSE Euronext cash markets operations room at the transatlantic stock market operator responsible for the proper functioning of the Paris, Brussels, Amsterdam and Lisbon stock markets in Paris August 19, 2011. REUTERS/Philippe Wojazer</p>