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May-01-2008UPDATE 1-CME April volume up 30 percent on year(topic overview)
CONTENTS:
- Formed by the 2007 merger of Chicago Mercantile Exchange Holdings Inc. (CME) and CBOT Holdings, Inc. (CBOT), CME Group serves the risk management needs of customers around the globe. (More...)
- They are currently readying paperwork to address whether any antitrust issues exist with the merger. (More...)
- Nymex floor-traded energy futures and options averaged 236,894 contracts a day for the latest quarter, down compared to 329,524 contracts per day for the same period of 2007. (More...)
- The products, which have been available for trading since 1999, traded 927,461 contracts in 2007 with a notional value of $18 billion. (More...)
- Nymex Holdings Inc. reported a 27% rise in first-quarter net income as market volatility helped boost the exchange's average daily volume. (More...)
- The trend reflected strong turnover in CME's electronically-traded equity index products, as well as improved growth in interest rate contracts. (More...)
- The New York-based company reported net income for the first quarter of $71.19 million, up 27% from $56.22 million in the year-ago quarter. (More...)
- CME Group Commodities and Alternative Investments product line includes the legacy CME commodities and alternative investments product line and the legacy CBOT agricultural product line and metals, energy and other product line. (More...)
- Clearing and transaction fees reached $179 million, up 29.6 percent from a year earlier. (More...)
- A large part of the slow adoption of weather hedging among companies that are so clearly impacted by the weather is unfamiliarity with the weather risk marketplace. (More...)
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Formed by the 2007 merger of Chicago Mercantile Exchange Holdings Inc. (CME) and CBOT Holdings, Inc. (CBOT), CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on its trading floors. CME Group offers the widest range of benchmark products available across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, and alternative investment products such as weather and real estate. [1] CME Group and Storm Exchange Unveil Results of National Benchmark Study on Corporate Weather Risk Management Practices SAN DIEGO and CHICAGO, April 29 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, and Storm Exchange, Inc., a leading weather risk management originator, announced today the results of a benchmark study which revealed that 82 percent of senior finance and risk managers believe global climate change will require changes to their business models in the years ahead. When it comes to taking proactive steps to manage their weather risk, 51 percent concede that their companies are not well prepared to cope with the current day-to-day economic risks posed by the weather. The study, commissioned by CME Group and Storm Exchange, also found that just 42 percent of those surveyed said their companies have attempted to quantify their exposure to the weather, and only 10 percent had used weather options or futures to hedge that exposure. Of those respondents who said their companies have used weather hedging tools, 86 percent said they found them useful. "This survey shows that not only will managing weather risk become increasingly significant, but also that hedging tools such as futures and options on weather that are now available are extremely important," said Felix Carabello, Director of Alternative Investments at CME Group. "We hope this survey will help businesses understand the value of hedging weather risk, and also that the market has resources available to them to manage their exposure."[2]
CHICAGO, May 1 (Reuters) - CME Group Inc (CME.N: Quote, Profile, Research ), the world's largest derivatives exchange, said on Thursday that average daily volume in April rose 30 percent from the same month a year earlier, picking up from slower growth in March.[3]
Nymex, which is being acquired by the operator of the Chicago Mercantile Exchange (nyse: CME - news - people ), the CME Group, said net income rose to $71.2 million, or 75 cents per share, from $56.2 million, or 59 cents per share, in the year-ago period.[4] Net income for the first quarter rose to $71.2 million or 75 cents per share, from $56.2 million or 59 cents per share a year earlier. Excluding expenses of $7.9 million related to its pending merger with CME Group Inc (CME.N: Quote, Profile, Research ), earnings were $78.6 million or 83 cents per share.[5] Net income in the first quarter was $71.2 million, or 75 cents a share. If you exclude the $7.9 million the Nymex spent on its planned merger with Chicago-based CME Group, the earnings bettered analyst expectation of 82 cents a share by a penny.[6]
Excluding $7.9 million in costs related to the company's planned merger with CME Group CME, the profit was 83 cents a diluted share, which beat the consensus expectation of 82 cents, according to Thomson Financial.[7]
Results for the latest quarter include merger-related expenses of $7.9 million, of which about $6.7 million are considered non-deductible for income tax purposes, and consist primarily of professional fees incurred in connection with the company's proposed merger with the CME Group.[8]
Monthly NYMEX energy and metals volume on the CME Globex electronic trading platform increased 43 percent to average 942,000 contracts per day. All references to volume and rate per contract information in the text of this document assume combined legacy CME and legacy CBOT volumes and exclude our non-traditional TRAKRS products, for which CME Group receives significantly lower clearing fees than other CME Group products, and Swapstream products.[1] CME Group interest rate volume averaged 6.0 million contracts per day, up 24 percent from April 2007.[1] CME Group E-mini equity index volume averaged 2.5 million contracts per day, up 61 percent compared with April 2007.[1]
CME Group foreign exchange (FX) volume averaged 613,000 contracts per day, up 41 percent from the same period in 2007.[1] CME Group commodities and alternative investments volume averaged 937,000 contracts per day, up 10 percent, and represented the second highest monthly volume to date.[1]
Nymex electronic trading volume on CME Globex averaged 814,306 contracts per day, up 36% from the prior-year period.[8] Comex electronic trading volume on CME Globex averaged 204,899 contracts per day, representing an increase of 127% over electronic trading volume in the same period last year.[8]
Electronic trading volume increased 36%, but floor-traded energy futures dropped from 329,524 contracts per day to 236,894 contracts per day.[7]
Compared to the first quarter in the previous year, electronic trading was up 36 percent to 814,000 contracts a day, about 44 percent of the total daily volume.[6] Nymex initiated a new fee schedule on Jan. 1 and increased the market data fees on Feb. 1. This resulted in a 30% jump in clearing and transaction fees compared to last year's comparable quarter and a 13% leap for the data fees. It was the booming commodity market that pushed the average daily volume to a record 1.9 million contracts, a 24% improvement over the first quarter.[7]
Average trading volume hit a record of 1.871 million contracts per day, up 27 percent from a year earlier.[5] Total options volume rose 16 percent to average 1.8 million contracts per day, and total electronic options volume increased 23 percent to average 275,000 contracts per day.[1]
The Chicago-based group, which includes the Chicago Mercantile Exchange and the Chicago Board of Trade, said an average of 10.2 million futures and options contracts changed hands each day in April. That was up from 7.8 million contracts a day in April 2007 but down 24 percent from March, traditionally a busy month because of end-of-quarter position rollovers in financial contracts.[3] CME Group is traded on the New York Stock Exchange and NASDAQ under the symbol "CME". The Globe logo, CME, Chicago Mercantile Exchange, CME Group, Globex and E-mini, are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. TRAKRS and Total Return Asset Contracts are trademarks of Merrill Lynch & Co., Inc. These trademarks are used herein under license. All other trademarks are the property of their respective owners.[1] In March, CME Group Inc. (CME), which runs Chicago Mercantile Exchange and the Chicago Board of Trade, said it agreed to acquire Nymex Holdings for $9.4 billion.[8] CME Group, the operator of the Chicago Mercantile Exchange and Chicago Board of Trade, and Nymex announced the decision to merge in March.[7]
The company's Green Exchange Venture launched contracts on March 17. Nymex noted that its Dubai Mercantile Exchange venture in the Middle East has been growing in interest each month, recently reaching 14,000. The company said that it continued to make progress towards launch of its new slate of OTC and futures products for clearing through European clearing house LCH.Clearnet. Nymex announced that its Board of Directors approved a regular quarterly dividend of $0.10 per share to shareholders of record as of June 6, 2008, payable on June 27, 2008.[8] The parent company of the New York Mercantile Exchange, the world's largest physical commodities exchange, reported a 27% rise in first-quarter net income to $71.2 million, or 75 cents a diluted share.[7] The New York Mercantile Exchange posted a 27 percent increase in quarterly net income Thursday, saying that market volatility boosted trading volume and fees for the energy and metals futures market.[6] NEW YORK, May 1 (Reuters) - NYMEX Holdings Inc (NMX.N: Quote, Profile, Research ), parent of the New York Mercantile Exchange, posted a higher quarterly profit on Thursday as average trading volume hit record levels.[9] Nymex Holdings Inc.' s first-quarter profit jumped 27 percent as market volatility led to higher transaction and clearing fees, the operator of the New York Mercantile Exchange said Thursday.[4]
They are currently readying paperwork to address whether any antitrust issues exist with the merger. As a condition of the deal, the Nymex must acquire 75 percent of its 816 memberships. It will have a June 3 meeting with members who are disappointed by the financial terms of the merger, feeling that it undervalues the exchange. The Nymex has an existing partnership with the CME Group to trade on its electronic platform. [6] CME Group, the world's largest and most diverse derivatives exchange, today announced the appointment of Nelson Low as Director, Commodity Products, Asia. In this newly-created position, Low will be responsible for growing CME Group's commodities business, including leading sales, marketing and education efforts throughout Asia. He will be based in Singapore and will report to Robert Ray, Managing Director, Commodities, Equities and International Sales. Low, 36, who has over 12 years of experience in the global commodities market, joins CME Group from the Singapore Exchange (SGX) where he served as Vice President, Product and Business Development. In this role, Low was responsible for leading the product development, marketing and education efforts for the exchange's commodity derivatives products. Prior to joining SGX, Low served as Regional Sales Manager, Trade, Asia-Pacific for Avebe U.A. where he managed the firm's physical trading operations across the region. He has also worked as a trader for Andre & CIE S.A.[10] Nymex Chairman Richard Schaeffer defended the $9 billion CME Group buy-out, saying it serves the best interests of members, shareholders and everyone involved in global commodity markets. Both exchanges expect to close the deal before the end of the year.[6]
Shares of CME Group rose $11.80, or 2.6 percent, to $469.25 in morning trading.[11]
April's daily trading in interest rate futures and options rose by 24 percent on the year, to 6 million contracts a day, but fell 20 percent from March.[3] Average daily volume of interest rate contracts rose 24 percent to about 6 million.[11]
Analysts' average earnings forecast was 82 cents a share, according to Reuters Estimates. NYMEX Chairman Richard Schaeffer told an investor call he ascribed the better-than-expected results to "growth trends in volume, strength in average rate per contract fees and disciplined expense management."[5] On average, eleven analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.82 per share for the quarter.[8] Excluding the merger-related expenses, Nymex's non-GAAP net income for the latest quarter was $78.59 million, or $0.83 per share.[8] On a per share basis, earnings advanced to $0.75 from $0.59 in the prior-year quarter.[8]
Analysts expected that figure to reach 82 cents per share, according to Thomson Financial.[4] Excluding a charge related to the planned sale of the company, profit came in at 83 cents per share.[4] The board declared a regular quarterly dividend of 10 cents per share, payable June 27 to holders of record on June 6.[5]
Nymex floor-traded energy futures and options averaged 236,894 contracts a day for the latest quarter, down compared to 329,524 contracts per day for the same period of 2007. [8] Nymex launched more than 40 new contracts in the first quarter, including ethanol and electricity futures contracts, a Brent crude oil options contract, and crude oil future indexes called the Crude Oil MACI and Backwardation/ Contango Index.[8]
Electronic volume averaged 814,000 contracts a day, up 36 percent over year-ago levels, as floor-traded energy futures and option contract volume dropped.[5]
CME Group lists Heating Degree Days and Cooling Degree Days on 35 cities in the U.S., Canada, Japan and Europe, as well as futures and options on futures on hurricanes and snow fall.[2]
Total Outcry tronic iated Apr-08 7,303 3,138 179 645 960 12,224 2,017 9,989 218 Mar-08 8,251 3,628 201 640 949 13,669 2,336 11,097 236 Feb-08 7,536 3,137 184 558 882 12,297 2,209 9,880 208 Jan-08 7,390 3,276 187 583 812 12,247 2,241 9,811 195 CME Group ( http://www.cmegroup.com/ ]] http://www.cmegroup.com/ ) is the world's largest and most diverse derivatives exchange.[1] More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, which is available in the Investor Relations section of the CME Group Web site.[1]
The products, which have been available for trading since 1999, traded 927,461 contracts in 2007 with a notional value of $18 billion. Storm Exchange provides corporations, governments and other clients with the specialized industry knowledge, benchmark indices, analytical tools and capital market access they need to execute a contract to hedge their weather-related risks. [2] About Storm Exchange, Inc. Storm Exchange, Inc. is a financial services company that protects corporations by reducing the financial impact of unplanned weather on revenue, production costs and operations. Storm Exchange provides weather risk management solutions to corporations in industries such as agriculture, energy, retail, outdoor entertainment, travel and construction. The Company's stated mission is to be the market of choice for originating weather hedges and the standard by which companies analyze quantify, monitor and manage their financial weather exposure.[2] "At a time when executives, corporate boards and regulators are clamoring for a stronger commitment to enterprise risk management, it is becoming unacceptable for a company to pass on the opportunity to measure and manage the risk that weather presents to financial performance," said David Riker, CEO of Storm Exchange.[2]
Nymex Holdings Inc. reported a 27% rise in first-quarter net income as market volatility helped boost the exchange's average daily volume. [12] NYMEX energy and metals volume traded on CME's Globex electronic trading platform increased by 43 percent.[3] The acquisition builds on a two-year partnership between the companies in which Nymex's contracts have traded on CME's Globex electronic trading platform.[8]
The trend reflected strong turnover in CME's electronically-traded equity index products, as well as improved growth in interest rate contracts. [3] Turnover in CME's E-mini stock index contracts jumped by 55 percent compared with a year earlier, while volume in standard equity index contracts was down 14 percent.[3] Total volume exceeded 224 million contracts for the month, of which 81 percent was traded electronically.[1]
In Thursday's regular trading session, NMX is trading at $93.87, up $1.27 or 1.37% on a volume of 0.20 million shares.[8] "We set electronic trading records, including COMEX gold and other metals, natural gas, heating oil, as well as overall electronic trading volume," President and CEO James Newsome said in a company statement.[7]
The New York-based company reported net income for the first quarter of $71.19 million, up 27% from $56.22 million in the year-ago quarter. [8] Total operating revenues for the 2008 first quarter were recorded at $208.9 million, also a 27% increase over the previous year's quarter.[7] Of the total operating revenues, clearing and transaction fees for the latest quarter rose 30% to $179.05 million from $138.18 million in the year-ago quarter.[8] Total operating expenses for the latest quarter, excluding direct transaction costs of $28.08 million and merger-related expenses of $7.9 million, declined 10% to $40.0 million from $44.4 million in the year-ago period.[8]
Market data fees climbed 13% to $26.21 million from $23.14 million in the same period last year. Other revenue increased to $3.61 million from $2.91 million in the previous-year quarter.[8] Operating income for the quarter rose to $132.89 million from $95.71 million in the same period a year ago.[8]
Quarterly operating revenues totaled $208.88 million, 27% higher than $164.23 million recorded in the equivalent quarter of the previous year.[8] Wall Street analysts had a consensus revenue estimate of $208.30 million for the quarter.[8]
The red hot commodities market translated into record volume in the first quarter for Nymex Holdings NMX, which beat analysts' expectations ahead of its planned acquisition.[7] Richard Schaeffer, Chairman of Nymex, said, 'The first quarter of 2008 was significant for Nymex, as we have continued to strengthen our competitive position and marketplace offerings, while also improving our financial performance.[8]
CME Group Commodities and Alternative Investments product line includes the legacy CME commodities and alternative investments product line and the legacy CBOT agricultural product line and metals, energy and other product line. [1] Further information about CME Group and its products can be found at http://www.cmegroup.com/.[2]
Clearing and transaction fees reached $179 million, up 29.6 percent from a year earlier. [5] Revenue rose to $208.9 million from $164.2 million a year before.[5]
Shares have traded between $399.01 and $714.48 during the past year.[11]
A large part of the slow adoption of weather hedging among companies that are so clearly impacted by the weather is unfamiliarity with the weather risk marketplace. Fully 45 percent of those surveyed said they did not think there were any effective or cost-effective ways to manage weather risk. [2]
SOURCES
1. CME Group April 2008 Volume Averaged 10.2 Million Contracts Per Day, Up More Than 30 Percent From Year-Ago Levels
2. Survey: Finance Executives Say Global Climate Change Will Require Changes to Their Business Models
3. UPDATE 1-CME April volume up 30 percent on year | Industries | Financial Services & Real Estate | Reuters
4. Nymex 1Q profit jumps 27 percent on higher trading volumes - Forbes.com
5. NYMEX posts higher profit on higher volume, contract | Funds | News | Reuters
6. Nymex earnings better than expected ahead of CME buyout -- chicagotribune.com
7. Nymex Beats on Trading Volume Spike | Financial Services | CME ETFC ICE NDAQ NMX NYX OXPS - TheStreet.com
8. Nymex Q1 Profit Rises 27% On Higher Average Daily Volume - Update [NMX] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
9. UPDATE 2-NYMEX posts higher profit on higher volume, contract | Funds | News | Reuters
10. SunHerald.com : CME Group Appoints Nelson Low as Director, Commodity Products, Asia
11. CME Group daily volume rises 30 percent in April - Forbes.com
12. Free Preview - WSJ.com
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