Sunday, November 25, 2007

Who Wants to Buy Nymex?

It has been a big year for consolidation among stock, options, and futures exchanges worldwide. It just seems to make sense, as the geographical proximity grows less relevant to investors, traders, and brokers alike.

The London Stock Exchange is now about one-third owned by enterprises that are themselves the arms of two rival Gulf states. Eventually, it seems the LSE will enter into a combination either with the Qatar Investment Authority or with the Dubai Borse. Which one? -- that is in Allah's hands.

The Chicago Mercantile Exchange and the Chicago Board of Trade, once fierce rivals despite their proximity, are now among the parts of the CME Group.

The New York Board of Trade is now a subsidiary of Atlanta based Intercontinental Exchange.

That will suffice for examples for now, though it would be easy to lengthen the list, even staying strictly within developments of 2007.

This leaves the question: why is Nymex still a stand-alone? and how long will that remain the case?

Steven Sears, writing in Barron's recently, suggested one reason. The internal politics at Nymex is, he says, of such distressing complexity that a potential acquirer might wisely want to steer clear of it. In the same way that a wise superpower might want to avoid sending an occupation force to a country with ... oh, never mind.

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