NYX 4Q09 Earnings Call – Feb 8, 2010

We expect NYX to report EPS of C$0.50, two cents above consensus, but we expect 2010 EPS to be 10% below consensus.

· NYX has converged to its historical 8% P/E premium over NDAQ. It is now trading at 11.4x our 2010 EPS and 10.6x our 2011 EPS estimates.

Cash equity markets performing poorly:

· NYX US cash equities ADV was down -35% Y/Y and 8% sequentially in 4Q09 on lower industry volumes. Market share was flat Q/Q at 28%.

· In Europe, the number cash trades was down -15% Y/Y. Pricing pressure is expected to continue as MTFs are matching over 27% of blue chips.

Derivatives markets improving but with uncertain questions ahead

US

· US options ADV was up 50% Y/Y to 2.7 mn contracts in 4Q09 with market share reaching a record 23.1% in December. NYX became the #2 options exchange.

· Amex saw its volumes boosted by liquidity providers BofA Merrill Lynch, Barclays, Citadel, Citi, Goldman Sachs, TD Ameritrade and UBS, which acquired minority stakes in the exchange during the quarter.

· But the Obama administration´s ban on banks´ proprietary trading could undermine the trend; prop trading accounts for more than 22% of NYX volume, compared to 13% for ISE, 11% for CBOE and PHLX and less than 6% for BOX.

Europe

· LIFFE interest rate ADV was up 16% Y/Y to 1.8 mn contracts in the quarter, with open interest up 10% from the previous quarter (10% below pre-Lehman levels).

· European Central Banks signaling the beginning of a monetary tightening boosted IR open interest at year end, which indicates higher IR volumes ahead.

· LIFFE equity derivatives were down -8% Y/Y to 1.1 mn contracts as volatility reverted to normal levels.

Provided By: Equity Research Desk, www.erdesk.com