UPDATE:NYSE Euronext Looks To Bright Side At Shareholder Mtg
April 02 2009 - 10:29AM
Dow Jones News
NYSE Euronext (NYX) executives attempted to soothe rattled
shareholders at the company's annual meeting Thursday, emphasizing
its sound balance sheet and new ventures.
Still, it proved difficult to shift shareholders' attention from
the stock price, down more than 70% over the past 12 months and
trailing the exchange sector.
"We accomplished everything we wanted to last year," said Chief
Executive Duncan Niederauer, highlighting record earnings in 2008
and new initiatives as shareholders aired concerns around
compensation and corporate governance.
NYSE Euronext shares were up 7.1% at $19.70 in recent trading
Thursday.
Speaking in New York, Niederauer expressed frustration that
exchanges often are lumped in with financial services companies,
noting that NYSE Euronext had taken no government money and that
its balance sheet is "healthier than it was a year ago."
The financial crisis represents an opportunity for exchanges to
be part of the solution, Niederauer said, and NYSE Euronext is
working with regulators to focus on transparency and
accountability.
"It's a bit self serving, but if that's where regulators want to
take it, that's where we can...position ourselves as part of the
solution," Niederauer said, adding that regulated, centrally
cleared markets functioned well throughout the financial
crisis.
The exchange has reached out to financial authorities, last week
joining with rival Nasdaq OMX Group (NDAQ) and other exchanges in
urging Securities and Exchange Commission Chairwoman Mary Schapiro
to implement a "modified uptick rule" that would limit short
selling of stocks.
Niederauer played up NYSE Euronext's investments over the past
year, including acquisitions of the American Stock Exchange and
metals derivatives from CME Group Inc. (CME).
But he also acknowledged that the exchange had lagged
competitors in implementing new technology as trading increasingly
moves onto electronic platforms.
NYSE Euronext and Nasdaq OMX have seen market share of U.S.
equities trading slip away as electronic rivals like BATS Exchange
and Direct Edge now claim more than a fifth of the market.
In response, NYSE Euronext has adjusted its fee schedule,
implemented a new market model and sought to tap so-called dark
pool trading through new ventures in the United States and
Europe.
A key focus this year will be cutting expenses, Niederauer said,
and NYSE Euronext may reduce headcount further before the year is
out.
The trans-Atlantic exchange operator has planned to reduce its
European staff by about 200 by the end of 2009, and continues to
cut jobs as it integrates the Amex unit.
In early February, headcount at the former Amex had shrunk to
225, down 50%, and the company expects it to eventually fall to
about 100.
One of those leaving the company is Jean-Francois Theodore,
deputy chief executive, who will be stepping down at the end of the
year.
NYSE Euronext plans to find a European-based successor by the
time he leaves, according to officials.
Niederauer said he sees consolidation on hold for the exchange
industry, following a rapid succession of deals in recent years
that included the formation of NYSE Euronext itself.
"Consolidation is always out there as a possibility, but people
right now are weighing whether we've gotten everything we can out
of the U.S.-European consolidation [that has already happened],"
Niederauer said.
-By Jacob Bunge, Dow Jones Newswires; 312-750-4117;
jacob.bunge@dowjones.com