NYSE's Profit Margins in Equities Could Pick Up Following Merger

Filed under: NYSE Euronext (NYX)

NYSE Euronext (NYX), which competes with Nasdaq OMX (NDAQ) and CME Group (CME), is the world's leading stock exchange in cash trading, both in terms of volume and value. NYSE provides the trading platform and services for trade execution of stocks listed on its exchanges -- NYSE, NYSE Arca, NYSE Amex -- as well as for orders that are routed to other market centers for execution. It charges transaction fees for executing these trades.

Due to the global economic downturn, NYSE Euronext's EBITDA margin from its cash equity trades in its U.S. exchanges tumbled from around 38% in 2006 to -4.2% in 2009. The margin recovered a bit in 2010, and we expect it to increase slightly in the short term and stabilize thereafter, owing to fierce pricing competition among stock exchanges to gain more volumes. NYSE Euronext could however benefit from economies of scale from its merger with Deutsche Boerse (DBOEY), which can push its margin higher.

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NYSE's Profit Margins in Equities Could Pick Up Following Merger originally appeared on BloggingStocks on Sun, 06 Mar 2011 16:00:00 EST. Please see our terms for use of feeds.

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