By Ivy Schmerken, Wall Street & Technology
Looking at fast growth in less developed markets, NYSE Group has acquired an equity stake in Marco Polo Network Inc.(MPN), an electronic platform providing connectivity and order routing to equities and derivatives listed on emerging market exchanges. Details of the transaction were not disclosed.According to Monday's announcement, Marco Polo Network offers intra-market connectivity and routing to brokers and exchanges in more than 40 emerging markets through local exchange and brokerage relationships. These markets provide investors with access to more than 90 percent of the MSCI (Morgan Stanley Capital International) emerging markets index, stated the release.
The deal suggests that NYSE Group, operator of the New York Stock Exchange and NYSE Arca (formerly known as Archipelago Exchange) is looking beyond its pending acquisition of Euronext, which offers access to established pan-European equities and derivatives markets, and is now setting its sights on faster growing emerging markets.
"The emerging markets are the fastest growing component of the global capital markets. In aggregate they are the second largest equity markets in the world as measured by capitalization and turnover," stated Vinode Ramgopal, MPN's CEO in the release. Future growth for exchange listings of securities is expected to come from the "BRICs" economies (Brazil, Russia, India, China), the release noted. No stranger to emerging markets, NYSE Group already lists 64 companies from BRICs countries, more than any other exchange, according to the release.
The ownership stake in MPN coupled with the June 1st transatlantic deal to create a merger of equals with Euronext, carries out the stated strategy of NYSE Group CEO John Thain to diversify the predominantly U.S. equity marketplace into products that span multiple currencies, geographies and asset classes.
The NYSE may also be hedging its bets in case the Euronext transaction doesn't pass muster with shareholders in the December vote. If this were to happen, the NYSE is positioning itself to become a global player with or without Euronext.
But if the merger is consummated, NYSE Group could leverage Euronext's majority interest in GL Trade, which owns a vast order routing network, GL NET.
Underscoring its access to emerging markets, on Tuesday GL Trade announced that WOOD & Company became the first Central European broker to use direct market access (DMA) to Prague, Budapest and Warsaw stock exchanges via GL NET. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio