The stellar early increase in New York Mercantile Exchange (Nymex)'s share price following the exchange's recent IPO brought it into range with other listed exchanges in terms of earnings ratio. This caused some observers to speculate that the listing was undervalued by its book runners, leading to the share price doubling on day one.
Nymex's P/E ratio on 21 November was 72.68, significantly above Chicago Mercantile Exchange (CME)'s 59.51 but still below that of rival Intercontinental Exchange (ICE), rated at 85.05.
ICE and Nymex's high ratings were believed by analysts to reflect favourable views on the commodities sector, while ICE's status as a newer, growth business and concerns over threats to Nymex's major product suites hinted at its lower rating.
Indeed, one market source commented that the threats to Nymex's business and its ongoing commitment to paying for CME's Globex electronic trading system made Wall Street's...