NYSE Euronext is a Euro-American corporation that operates multiple securities exchanges in US and Europe and was established in 2007 when NYSE merged with Euronext.
NYSE Euronext or Euronext N.V as it was earlier known is a stock exchange that is located in Amsterdam. It has subsidiaries in the United Kingdom, Portugal, France, Netherlands and Belgium. Not only does it have derivatives markets and equities markets but it also provides information services as well as clearing services. As of August 2010 this stock exchange had $2.41 trillion as its market capitalization. It also holds the honor of being the fifth largest stock exchange in the world.
The trading hours of NYSE Euronext extends from 9am to 5.30pm CET on working days. Some of the holidays which are observed are New Year's Day, birthday of Martin Luther King Jr., President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. These holidays are usually declared in advance by the stock exchange.
NYSE Euronext not only enjoys cross-access agreements but cross-membership agreements as well with the Helsinki Exchange for cash trading and the Warsaw Stock Exchange for the purpose of their derivatives products and cash products. All the quoted companies are encompassed by the Euronext List.
Its trading segments can be explained as follows:
- NextEconomy - This is one of the trading segments of the stock exchange which consists of companies that are active, in the sense that their equities are traded continuously. These companies should be active in the biotechnology and information technology sectors.
- NextPrime - This is another segment of Euronext which consists of companies that in spite of trading continuously are mainly focused on the more traditional sectors.
Each of these segments, the NextPrime and NextEconomy have its own price index as well as total return index which is weighted with the help of market capitalization and the shares listed in the Euronext 100 is excluded. Inclusion in any of these two segments is voluntary.
Main Stock Indices
The main stock indices that track the performance of the NYSE Euronext are listed as follows:
- Euronext 100 Index - This is a blue chip index of the stock exchange. It is a list of the most liquid stocks as well as the largest stocks on Euronext. The Euronext 100 Index is reviewed four times a year using a liquidity and size analysis. Each of the stock in this index is provided with a sector classification.
- AEX Index - This index is derived from Amsterdam Exchange Index. It is an index that comprises of Dutch companies which are known to trade on the Euronext Amsterdam (previously known as Amsterdam Stock Exchange). The AEX Index was started in 1983 and is made up of the 25 of the securities that are most actively traded on the stock exchange.
- CAC 40 - This is a French stock market index that serves as a benchmark. It represents forty of the most important values among Euronext Paris' 100 highest market caps. This is an important national index.
- Euro Stoxx 50 - One of the main stock indices of NYSE Euronext, this index comprises of Eurozone stocks that are designed by Stoxx Ltd. The goal of this organization is to provide the Supersector leaders with a blue-chip representation.
The origin of NYSE Euronext could be traced back to 22nd September 2000 when one of its half, the Euronext was formed as a result of the merger between the Paris Bourse, the Brussels Stock Exchange as well as the Amsterdam Stock exchange. This merging took place with an aim to take advantage of the synchronization enjoyed by the financial markets of the European Union.
It was in 2001, during the month of December Euronext managed to acquire the shares of LIFFE, which stands for London International Financial Futures and Options Exchange, which till date continues to operate under the governance of Euronext. In January 2002, Euronext.liffe was formed which offered a wide range of option products, futures, bonds, equities, swaps and commodities.
In the year 2002, a merging with the BVLP, an acronym for Bolsa de Valores de Lisboa e Porto which is a Portuguese stock exchange took place. After the merging it was renamed as Eurnoext Lisbon and it continues to operate under the same name till date.
In the beginning of the year 2003, the electronic trading platform of LIFFE, LIFFECONNECT started trading all the derivatives products.
On April 4th 2007 Euronext merged with the NYSE or New York Stock Exchange group and came to be known as NYSE Euronext to form the first global stock exchange. Because of the apparent moves to acquire the London Stock Exchange by the NASDAQ, the NYSE owner decided to offer a sum of US $10.2 billion in shares and cash for acquiring Euronext. The NYSE was not the first to try to merge with Euronext, the operator of Deutsche Borse, a German stock market also tried to merge with Euronext but was outbid by NYSE. It so happened that this German Stock Market dropped out of the bidding as proved on 15th November 2006 and hence the NYSE Euronext benefited by this action. The merging with NYSE is one of the most important milestones in the history of Euronext.
Written by: Goran Dolenc
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