NYSE Group Inc. went public last week. In the past years, Chicago Mercantile Exchange has done extremely well after going public. This blog takes a look at NYSE Group and its financials to see if NYX can have the same upside.
From the investor relations site, we have the following information about NYX.
NYSE Group, Inc. (NYSE: NYX) is a holding company that, through its subsidiaries, is a leading global multi-asset financial marketplace that operates multiple securities market centers, including the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or Arca Ex®, and the Pacific Exchange). Through these market centers, the NYSE Group is a leader in securities listings, market-information products and services, and offers a range of investment vehicles and order execution services.
Nyse is a leader in its field - providing the largest and the most liquid equities market. On an average day $69billion worth of transactions are carried out in NYSE with an average volume of 1.8 billion. The market capitalization of listed securities is 22.5 trillion.
Since NYX is a merger between NYSE and Archipelago, we will look at the individual companies to see their strengths. NYSE has acted as a non profit organization whereas archipelago was a for profit organization.
The NYSE Group revenues are flat around 1 billion dollars between 2003 and 2004. The listing fees the company charges for listing has increased while revenues through other streams remained steady or slightly declined. The company makes money by charging data processing fees, market information fees, trading fees, regulatory fees, facility and equipment fees, membership fees and through investment income.
We wont go in to the financial details as they are a bit old. However, some trends are worth noting. Number of companies listed on NYSE continues to increase as does the stock volume. Given the continued globalization in the world economy, we should continue to see an increase in this trend in the upcoming years. This will be offset by declining fees charged for equity trades. One other factor to notice is members equity in NYSE has increased over the past several years.
This bodes well for the stock holders of this company.
ArcaEx on the other hand has been a growth story through and through. It has been growing market share in Amex, Nyse and Nasdaq every year. Its overall U.S market share has grown from 8.9% to 14.2% from 2002 to 2004. Meanwhile revenues have grown from 357 million to 541 million in the same period.
The combined company has about 1.6 billion in revenues and 11.8 billion in market cap currently. While this stock is not going to be a ten bagger like Chicago Mercantile Exchange, the global trends definitely give this stock some upside in the next three years.