Dan

Company Profiles - Euronext

Some company's complexity is hidden behind a simple faade. What would be more simple to provide a platform where people can trade stocks? This is like central market where buyers and sellers meet. The arbiter establishes prices by means of an order-book. There is not much more to it...

But in fact there is. Euronext and other Stock-Exchanges are like the road on which we drive to our work. The main difference is that in the stock-market road, there is no short-cut or other connection: if the Stock-market road is blocked, than there is no traffic.

Euronext has been acquired by the NY Stock exchange in 2006, NYSE "... operates the world's leading and most liquid exchange group, and seeks to provide the highest levels of quality, customer choice and innovation. Its family of exchanges, located in six countries, include the New York Stock Exchange, the world's Find a real date tonight! cash equities market; Euronext, the Eurozone's largest cash equities market ... NYSE Euronext's nearly 4,000 listed companies represent a combined $30.5 trillion/ 20.9 trillion in total global market capitalization (as of Dec. 31, 2007), more than four times that of any other exchange group. NYSE Euronext's equity exchanges transact an average daily trading value of approximately $141 billion/103 billion (as of Dec. 31, 2007), which represents more than one-third of the world's cash equities trading. NYSE Euronext is part of the S&P 500 index and the only exchange operator in the S&P 100 index:" (1)

As being infrastructure it is a company that has little visibility. With all electronic interfaces it is hardly possible to see when this company is part of the transaction (individual) investors execute on this exchange. There are scarce moment when this visibility is an issue: when there is a problem. The EURONEXT is the bottleneck where everything comes together. It is therefore a very valuable investment on itself.

And the value is even higher if a single stock-market is part of a global platform. "Due to apparent moves by NASDAQ to acquire the London Stock Exchange, NYSE Group offered 8 billion euro ($10.2b) in cash and shares for Euronext (may 2006), outbidding a rival offer for the European Stock exchange operator from Germany's Deutsche Brse, the German stock market." (2)

But is also critical. Today and many other days, banks and stockbrokers cannot show the actual quote of the AEX index just because euronext is engaged in a technical problem. Those moments the confidence in Euronext falls like a company's stock that is reporting a profit warning. And this is only the information reporting function. When the Exchange is experiencing a larger problem where brokers and bank are not able to trade, it provokes a real disaster. That's why the main target of this company is to offer "availability: like the electric current, it must be always up-and-running, if this cannot be arranged for ever, the value of the stock exchange is worthless.

So yes, "...seeks to provide the highest levels of quality, customer choice and innovation," but quality in this case starts with availability of the service. This is a big challenge, because the stock-exchange must accommodate continuous number of changes and during all those changes, the show must go on!

(1) - www.euronext.com/landing/indexMarket-18812-EN.html" TARGET="_blankhttp://www.euronext.com/landing/indexMarket-18812-EN.html

(2) - (2) en.wikipedia.org/wiki/NYSE_Euronext" TARGET="_blankhttp://en.wikipedia.org/wiki/NYSE_Euronext

H.J.B.

Hans Bool

posted by datdk @ 9:02 AM