2nd UPDATE: NYSE CEO Sees High-Speed Firms Heading For Dark Pools
30 Aprile 2012 - 3:48PM
Dow Jones News
Regulatory scrutiny around high-speed trading strategies appears
to be pushing the business away from stock exchanges and into
lesser-regulated platforms such as "dark pools," according to the
top executive of NYSE Euronext (NYX).
So-called high-frequency trading firms' move into other asset
classes and geographies also seems to be gaining momentum from
growing rhetoric on the method of rapidly trading shares and other
products, said Duncan Niederauer, chief executive of the Big
Board's parent company.
"I do think they have shifted some of their volume," Niederauer
said Monday on a conference call discussing NYSE's first-quarter
financial results, referring to electronic trading firms.
High-speed traders' pullback from registered exchanges like
those run by NYSE Euronext adds to headwinds facing the market
operator, which on Monday reported a 44% net profit decline in the
first quarter driven by a widespread drought in trading.
The company's revenue from transaction fees fell by one-quarter
from the year-earlier period as investors generally stuck to the
sidelines of stock markets in the U.S. and Europe, while currency
losses and charges from the failed merger with Germany's Deutsche
Boerse AG (DBOEF, DB1.XE) also weighed on results.
Shares of NYSE Euronext were down 1.9% to $26.55 in light
pre-market trading on Monday.
Turnover in U.S. listed stocks dipped to about 6.8 billion
shares traded on average each day in the first quarter of 2012,
representing the market's slowest quarter in the past four and a
half years. Investors have pulled out of mutual funds and trimmed
their own trading amid fears driven by the European debt crisis and
confidence-rattling events like last summer's dramatic market
swings.
"We knew and expected this would be a challenging quarter for
us, given the difficult environment," said Niederauer.
Niederauer said he saw a "more normal environment" potentially
returning in 2013 or 2014.
For the first quarter of 2012, NYSE Euronext's net profit fell
to $87 million from $155 million a year earlier, while revenue
slipped to $601 million from $679 million. Operating earnings per
share were 47 cents, below analysts' expectation of 48 cents a
share.
Revenue related to information services and technological
solutions increased 4% in the first quarter to $121 million. The
company, which collects fees in U.S. dollars, euros and pounds
sterling, took a $2 million hit from currency fluctuations over the
quarter.
The company declared a cash dividend of 30 cents a share for the
second quarter.
NYSE Euronext said it bought back 4.3 million shares at an
average price of $29.73 a share in the first quarter.
NYSE Euronext said costs for the quarter were down 3% as it
looked to "streamline" its operation. Those efforts have included
exiting some investments, including a joint venture to develop U.S.
and Asian carbon markets.
-By Jacob Bunge, Dow Jones Newswires; 312-750-4117;
jacob.bunge@dowjones.com
-Noemie Bisserbe contributed to this article.
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