Analysts are weighing in with their opinions on Nasdaq's acquisition of the Boston Stock Exchange for about $61 million, announced earlier this week. While many of us were still digesting Nasdaq's transactions with Sweden's OMX AB, Borse Dubai as well as the unwinding of its position in the London Stock Exchange, Nasdaq announced a second deal on the domestic front.

Brad Bailey, senior analyst at Aite Group, offered the following on the deal: “Nasdaq, not satisfied with Dubai, Sweden and London, has announced it will acquire the Boston Stock Exchange. This acquisition will give Nasdaq a second equity license, a clearing license, access to Tape B, and a second options license. It will allow Nasdaq to cut costs and increase market data revenue and possibly increase its market share by one to four percent.”

Meanwhile, Dushyant Shahrawat, research director in TowerGroup's Investment Management Practice, comments, “Nasdaq's acquisition of the Boston Stock Exchange is yet another development in the great exchange liquidity land grab with exchanges fighting to buy-out smaller liquidity venues before they are snapped up by their competition. This brings the stock exchange consolidation game into the regional market with more established players buying regional players," he continues. TowerGroup's exchange expert also predicts that Nasdaq's purchase of BSE will provoke a response from its competition (i.e. NYSE), to acquire other regionals like Chicago, Philadelphia and National Stock Exchange.

Shahrawat cautions, “Regional exchanges are now faced with many challenges,
Specifically they no longer have liquidity, brand cache or technological budgets to
Rival that of the national exchanges.” Their three main sources of traditional revenues, data, listing fees and clearing/settlement fees are under pressure, says the analyst. “Exchanges are focusing on new revenue sources outside their bailiwick including OTC clearing,” he writes.

This is a public forum. CMP Media and its affiliates are not responsible for and do not control what is posted herein. CMP Media makes no warranties or guarantees concerning any advice dispensed by its staff members or readers.

Community standards in the message center do not permit hate language, excessive profanity, or other patently offensive language. Please be aware that all information posted to this forum becomes the property of CMP Media LLC and may be edited and republished in print or electronic format as outlined in CMP Media's Terms of Service.

Important Note: The Message Center is NOT intended for commercial messages or solicitations of business.