Exchange Trading

Wall Street Journal On-Line, November 10, 2006

2:07 p.m.: Next week's calendar of initial public offerings includes
another entry in the expanding group of publicly traded exchanges --
Nymex Holdings, which operates the New York Mercantile Exchange.
Most exchanges have been a boon for investors in the past few years,
notably Chicago Mercantile Exchange Holdings, which is up 1054%
since it first sold shares in December 2002. This year, the CME has
gained 35%, CBOT Holdings is up 55%, and NYSE Group is up 75%.
Regardless of the fortune of the assets traded on the markets, investors
are simply trading a lot more, thanks to the growth of the hedge-fund
and derivatives industries.

Will Nymex see the same kind of reception as the other exchanges? The
market is a smaller one than the CBOT and CME (which plan to merge);
it traded about 1.3 million contracts daily in the third quarter of 2006,
compared with six million daily for the CME in October. The Nymex's
daily average was up 41% from the same period a year earlier, however.

The company's market capitalization is estimated to be about $4.3 billion
after it sells its shares, compared with the CME's $17.6 billion market cap
and the NYSE's $12.9 billion market cap. Francis Gaskins, president
of IPOdesktop.com, notes that Nymex will come with a significant price
to-earnings discount to the CME and BOT -- a P/E of about 27,
compared with 43 and 46, respectively.
--David A. Gaffen