Euronext

Euronext
NYSE Euronext
Bourse Bxl 02.JPG
Type Stock exchange
Location Amsterdam, Netherlands
Founded September 22, 2000[1]
Owner NYSE Euronext
Key people Duncan L. Niederauer (CEO)
Currency Euro
No. of listings 1,176
MarketCap US$2.93 trillion (Dec 2010)[2]
Volume US$1.9 trillion (Dec 2009)
Indexes Euronext 100
AEX index
CAC 40
EURO STOXX 50
Website www.euronext.com

Euronext N.V. is a pan-European stock exchange based in Amsterdam[3] and with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services. As of Dec 2010, markets run by Euronext had a market capitalisation of US$2.93 trillion, making it the 5th largest exchange in the world.[4] Euronext merged with NYSE Group on April 4, 2007 to form NYSE Euronext, the "first global stock exchange". Both companies have approved the rumors that Deutsche Börse AG is acquiring NYSE Euronext with an expectation of 300 million Euro synergy savings from personnel salaries and infrastructure management costs.[5]

Contents

Background

Euronext was formed on 22 September 2000 following a merger of the Amsterdam Stock Exchange, Brussels Stock Exchange, and Paris Bourse, in order to take advantage of the harmonization of the European Union financial markets. In December 2001, Euronext acquired the shares of the London International Financial Futures and Options Exchange (LIFFE), which continues to operate under its own governance. Beginning in early 2003, all derivatives products traded on its affiliated exchanges trade on LIFFECONNECT, LIFFE's electronic trading platform. In 2002 the group merged with the Portuguese stock exchange Bolsa de Valores de Lisboa e Porto (BVLP), renamed Euronext Lisbon. Hours of operation on non-holidays are 9:00-17:30 CET.

Structure and Indices

Euronext has cross-membership and cross-access agreements with the Warsaw Stock Exchange for their cash and derivatives products, and with the Helsinki Exchanges on cash trading; ownership agreements are currently excluded. The Euronext List encompasses all quoted companies. It has two segments; NextEconomy, consisting of companies whose equities are traded continuously and are active in sectors such as information technology and biotechnology, and NextPrime, consisting of companies in more traditional sectors that are traded continuously. Inclusion in the segments is voluntary.

Euronext manages two broad-based indices. The Euronext 100 Index is the blue chip index. The Next 150 Index is a market capitalisation index of the 150 next largest stocks, representing the large- to mid-capitalisation segment of listed stocks at Euronext. The NextEconomy and NextPrime segments each have a price index and a total return index, weighted by market capitalisation and excluding the shares listed in the Euronext 100 Index. The indices have a base date of 31 December 2001, with a starting level of 1000 points. Six NextWeather weather indices for France, launched in January 2002, are among the sector indices planned by Euronext. Exchange traded funds, called trackers, comprise Euronext's NextTrack product segment, and have been introduced on the AEX index, CAC 40, Euro Stoxx 50, and various pan-European regional and sector indices. Euronext has introduced several commodity futures contracts, available to all constituents. Winefex Bordeaux futures are traded on Euronext Paris. Euronext.liffe is the subsidiary of Euronext responsible for all options and futures contracts trading, formed by the merger of the derivatives activities of the various constituents of Euronext with LIFFE.

Euronext.liffe

Euronext.liffe was formed in January 2002 from the takeover of the London International Financial Futures and Options Exchange by Euronext. The derivatives activities of the other constituent exchanges of Euronext (Amsterdam, Brussels, Lisbon and Paris), were merged into Euronext.liffe. Trading is done electronically through the LIFFE CONNECT platform. Euronext.liffe offers a wide range of futures and option products on short-term interest rates, bonds, swaps, equities and commodities. 200px used from 2000 to 2007 Volumes in 2004 were split as follows:

  • Interest Rate: 313.3 million contracts
  • Equities: 468.8 million contracts
  • Commodities: 8.0 million contracts

In addition to this, it sells its technology to third parties. Since April 2003, the Tokyo International Financial Futures Exchange has run on LIFFE CONNECT. Furthermore, in January 2004, the Chicago Board of Trade started electronic trading using e-cbot, which is powered by LIFFE CONNECT. As a result, the Kansas City Board of Trade and the Minneapolis Grain Exchange use LIFFE CONNECT for their overnight trading. 200px

Alternext

Alternext was formed in 2005 by Euronext to help small and mid-class companies in the Eurozone seek financing. Since the merger of Euronext and NYSE since 2006, now completed in 2007, this market is now a division of NYSE Euronext, named NYSE Alternext.

Merger with NYSE

Due to apparent moves by NASDAQ to acquire the London Stock Exchange,[6] NYSE Group, owner of the New York Stock Exchange, offered €8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006, outbidding a rival offer for the European Stock exchange operator from Deutsche Börse, the German stock market.[7] Contrary to statements that it would not raise its bid, on 23 May 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at €8.6 billion (US$11b), €600 million over NYSE Group's initial bid.[8] Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by SEC chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007.[9] The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City, with European operations and its trading platform run out of Paris. Then-NYSE CEO John Thain, who was to head NYSE Euronext, intended to use the combination to form the world's first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hoped to add Borsa Italiana (the Milan stock exchange) into the grouping.

Deutsche Börse dropped out of the bidding for Euronext on 15 November 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group's stock price in late 2006 made the offering far more attractive to Euronext's shareholders.[10] On 19 December 2006, Euronext shareholders approved the transaction with 98.2% of the vote. Only 1.8% voted in favour of the Deutsche Börse offer. Jean-François Théodore, the Chief Executive Officer of Euronext, stated that they expected the transaction to close within three or four months.[11] Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on 20 December 2006.[12] The merger was completed on 4 April 2007, forming NYSE Euronext.

Attempted Merger with Deutsche Börse

On November 25, 2008, Deutsche Börse and NYSE Euronext began merger talks which involved creating a holding company to buyout Deutsche Börse shareholders, then use Euronext to merge into the new corporation.[13] [14] A deal was reportedly not struck due to valuation differences. However, such a merger would create the largest exchange in history. [15]

See also

Factory 1b.svg Companies portal

References

  1. ^ "Euronext History". 2006-08-04. http://www.commoditytrader.com/2006/08/euronext_history.php. Retrieved 2010-11-29. 
  2. ^ World-exchanges.org
  3. ^ "Regulation". NYSE Euronext. http://www.euronext.com/landing/regulation-12602-EN.html. Retrieved 2010-09-23. 
  4. ^ NYSE Group 2006
  5. ^ http://www.nyse.com/press/1297249827662.html
  6. ^ MacDonald, A.; Manuel, G. (2006-12-12). "Nasdaq Formally Launches Bid for London Stock Exchange". The Wall Street Journal. http://online.wsj.com/article/SB116591445456147486.html. 
  7. ^ "NYSE and Euronext 'set to merge'". BBC News. 2006-05-21. http://news.bbc.co.uk/1/hi/business/5002438.stm. Retrieved 2006-05-22. 
  8. ^ "Deutsche Boerse outbids NYSE for Euronext merger". BBC News. May 23, 2006. http://news.bbc.co.uk/2/hi/business/5007230.stm. Retrieved 2006-05-23. 
  9. ^ Lucchetti, Aaron; Macdonald, Alistair; Scannell, Kara (June 2, 2006). "NYSE, Euronext Set Plan to Form A Markets Giant". The Wall Street Journal. http://online.wsj.com/article/SB114919826887369084.html. Retrieved 2006-06-02. 
  10. ^ Taylor, Edward; Lucchetti, Aaron; Macdonald, Alistair (2006-11-15). "Deutsche Börse Is Exiting Euronext Chase". The Wall Street Journal. http://online.wsj.com/article/SB116355794762023471.html. Retrieved 2006-11-15. 
  11. ^ Lucchetti, Aaron; Macdonald, Alistair (2006-12-19). "Euronext Shareholders Approve Acquisition by NYSE". The Wall Street Journal. http://online.wsj.com/article/SB116653086274154451.html. Retrieved 2006-12-19. 
  12. ^ "Big Board Holders Back Euronext Deal". The New York Times. 2006-12-21. http://www.nytimes.com/2006/12/21/business/worldbusiness/21nyse.html?ref=worldbusiness. Retrieved 2006-12-21. 
  13. ^ Euronext Boerse merger talks
  14. ^ "Deutsche Börse pitches merger with NYSE Euronext". Financial Times. 2008-12-06. http://www.ft.com/cms/s/0/7981cada-c3d0-11dd-a4a5-000077b07658.html. Retrieved 2008-12-09. 
  15. ^ Waller, Martin (2008-12-08). "Talks to create world's biggest exchange". London: Times Online. http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5303390.ece. Retrieved 2008-12-09. 

External links


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