ERDESK: NDAQ 1Q10 Earnings Call - Friday, April 30th at 8.00 am ET

We expect NDAQ to report EPS of $0.47, 1 cent above consensus estimates

NDAQ performance metrics have improved during 1Q10 compared to 2H09

· In US options, NDAQ PHLX captured a 26% market share during March, becoming the #1 US options exchange with an ADV of 3.7 million contracts

· European equities ADV increased 19% Y/Y to €2.6 mn. MTF market share of the OMX 20 index reached 22% during the last week

· European derivatives ADV rose 37% Y/Y and 38% sequentially to 528,000 contracts

· In US equities, NDAQ’s market share was flat at 24% during 1Q10 and declined to 22.2% during the current month

The fate of IDCG remains the main driver of valuation, subject to:

· Regulatory attempts to force Fannie Mae and Freddie Mac to begin clearing a large portion of their interest rate swaps transactions through CCPs bring $800 bn in notional amount outstanding to clearing houses

· NDAQ’s IDCG may benefit if US federal authorities privilege a US clearing facility over the incumbent SwapsClear

· But IDCG’s model, open to the buy side, still has to gain support from dealer banks.

· Congress’ potential bar on banks holding stakes in OTC derivatives clearing facilities would prevent IDCG from securing the support of the Bank of New York Mellon

NDAQ is trading at 10.2x our 2011 earnings estimates, a 20% discount to the S&P 500 index.

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