NYSE Euronext (NYX) said Monday it aimed to recapture market share in transatlantic equity markets and intensified efforts to trim costs.

The company hopes to recapture a 50% share in trades by New York Stock Exchange-listed stocks by year-end, and recapture business on its European bourses.

While symbolic, regaining the 50% share of NYSE execution comes against a backdrop of fierce competition in European equity markets from new entrants and falling volumes at its Liffe derivatives arm.

NYSE Euronext is shelving the stock buyback plan launched last October to preserve liquidity, but will maintain its dividend.

About $250 million in technology cost synergies are expected by the end of 2010, with $120 million on track for the first quarter of 2009.

The exchange operator has rolled out pricing initiatives on both sides of the Atlantic to recapture share.

"[Fifty percent] is a stretch goal," said Duncan Niederauer, chief executive, on a call after reporting a fourth quarter loss of $1.34 billion, or about $5.06 per share.

The $1.59 billion writedown of goodwill follows a sharp decline in the share price of the company following the 2007 merger of NYSE Group and Euronext Liffe.

The writedown was prompted by "adverse market conditions" that saw the exchanges' combined value of $20 billion fall to $6.5 billion as valuations, particularly in the financial sector, were pummeled by the credit crisis.

The impairment charge is "a reflection of the realities of the market we're operating in," said Niederauer.

NYSE Euronext shares were down 8.5% at $20.93 in midday trading.

Derivatives exchange company CME Group Inc. (CME) last week reported $292.5 million in write-downs and charges related to its equity stake in the Brazilian exchange BM&F Bovespa SA (BVMF3.BR), though no similar announcements were made regarding CME's 2008 acquisition of the New York Mercantile Exchange or the 2007 deal for the Chicago Board of Trade.

 
   Market Model, Fee Adjustments Seen Driving Volumes

To bolster market share NYSE Euronext is banking on a new market model, which replaced the specialist role with designated market makers and added a new class of supplemental liquidity providers.

A new fee structure, intended to attract more high-frequency traders, is slated to come online in March, along with improved low-latency technology.

Michael Geltzeiler, chief financial officer, credited the model with "attracting liquidity that historically hasn't come through the floor."

More adjustments to the fee structure, in which liquidity providers are now paid rebates and net takers of liquidity pay fees, could follow, according to Niederauer.

"We still have some room to tinker with rates on both sides of the equation," he said. "We'll watch it on a day-to-day basis and adjust accordingly."

In April 2008, the NYSE's share of U.S. equity trading fell below 50% for the first time amid intensified competition from Nasdaq OMX Group Inc. (NDAQ) and alternative trading venues such as Bats Trading and Direct Edge.

After moving higher in recent months, NYSE Euronext's share of Tape A transactions slipped in January, falling to 42.3% from 43.4% in December.

Total volume for U.S. cash products in January declined 8.9% for the month. Trading in European cash products volume slid 30% and European derivatives volume decreased by 18%.

 
   Credit Derivatives Clearing Stalled

NYSE Euronext remains the de facto leader in the race among exchanges to offer clearing for credit derivatives trades, with a service launched in late December on NYSE Euronext's BClear platform in Europe.

However, officials acknowledged Monday that volumes continue to be "slow or nonexistent" after the platform saw no transactions in its first month of operation, due to ongoing integration with customer systems.

The BClear platform initially is clearing trades in European index credit default swaps. NYSE Euronext officials expect to add credit default swaps on U.S. indexes.

For non-index-based credit derivatives, Niederauer said that a separate clearing fund may need to be established.

Credit default swaps represent "the first of many" over-the-counter products for which the company will look to provide clearing services, according to officials, highlighting an area that exchange officials hope will drive revenue in a year that promises reduced trading activity.

While multiple exchanges are targeting the CDS market, Nasdaq OMX and TMX Group (X.T) are looking to clear trades in the much-larger interest-rate swap market.

NYSE Euronext officials also announced Monday that it would restructure its Qatar acquisition, partnering with the State of Qatar as the Doha Securities Market transitions into an integrated cash and derivatives exchange known as the Qatari Securities Market.

The restructuring will see NYSE Euronext reduce its ownership stake to 20% and its cost to $200 million, paid over the coming four years, officials said.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

(Nicolas Parisie contributed to this report)