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NEW YORK - The New York Mercantile Exchange, the historic home of oil trading on Wall Street, is going public today, in what has been billed as the hottest float of the year, and more evidence that the market for initial public offerings is booming.
The Nymex - one of the last major exchanges to demutualise - is raising up to US$371 million ($559 million) and has already once been forced to increase the indicated float price and boost the number of shares being sold.
Investors believe that a publicly quoted Nymex could soon be drawn into the wave of consolidation sweeping the world's stock markets. The New York Stock Exchange is one of several businesses touted as a potential buyer.
The exchange was created by dairy merchants in 1872 as a place to trade butter and cheese, and it changed its name to the New York Mercantile Exchange a decade later. Today, its open-outcry trading floor accounts for two-thirds of global trading in energy futures and options.
Demand for the float has been fuelled by the soaring volumes of trading in futures and options, which is growing at about 30 per cent a year. The Nymex's rival, the Chicago Mercantile Exchange, has seen its shares rise 14-fold since its flotation in 2002.
"Who would have thought a stock exchange would be the hottest company going public this year?" said Art Hogan, the chief market analyst for Jefferies & Co. "People are trying to get to a window of opportunity as these exchanges consolidate to get more market share. Everybody hopes they are buying the next Chicago Merc."
The Nymex float comes on the heels of two giant public offerings yesterday, car rental company Hertz and military contractor KBR (spun out of Halliburton) and takes the total money raised by companies this week to more than US$3 billion.
- INDEPENDENT
