Trading up on economic slowdown, says CME Group

Source: Exec Digital USA

Date :2/5/2008 10:39:12 AM

Futures market CME Group has outperformed analysts’ expectations by reporting 4Q earnings of $201.1 million on record trading fueled by concerns for the slowing economy.

The results, equivalent to $3.75 a share, overcame predictions that the world's largest futures exchange would earn $3.58 a share, largely driven by investors’ speculation on the interest rates, commodities and equity indexes.

Trading on these contracts has long been a popular way of protecting investment portfolios against turbulence from swings in interest rates or gyrations in the stock market.

Acquisition

Also detailed in the report was last year’s purchase of the Chicago Board of Trade for $11.7 billion, a deal which added considerably to CME’s revenue. Last month the company announced that it is considering offering about $11.3 billion for Nymex Holdings Inc., which hosts trading of energy and metals contracts, to continue its expansion policy.

"This demonstrates the value of our markets for a customer base that is expanding globally. Moreover, our successful merger with the Chicago Board of Trade enables us to serve these customers more efficiently and effectively, as represented by the recent migration of all e-cbot interest rate, equity and agricultural products to the CME Globex electronic platform," said CME Group Executive Chairman Terry Duffy in today’s report.

February 5, 2008