After reporting record revenues and net income for the third quarter, Nymex Holdings Inc. announced a plan intended to reduce costs and take into account, “the evolving business model of the Exchange.” The exchange will raise fees for Nymex and Comex data feeds to bring in an additional $50 million. In addition, the exchange will reduce expenses by another $22 million, including $10 million per year savings from firing 120 workers over the next five quarters.
“This plan represents a disciplined approach to our process of capturing the benefits of our migration from open outcry trading to electronic trading and will continue to position Nymex as one of the most profitable and efficient exchanges,” said Richard Schaeffer, Nymex Chairman, in a press statement. Nymex also has listed its headquarters for sale. A sale could reduce operating expenses by $12 million per year.
In other news, Nymex plans to launch the MBF Alpha Commodities Index (MACI), which offers a way to mitigate roll risk in commodity futures. The MACI is comprised of ownership in both a six month rolling strip of futures and a smoothing index called the Cumulative Roll Differential (CRD). It has a maturity of three years and an additional contract will be initiated annually. The MACI is going to start with WTI Nymex crude oil contracts.
Also Nymex Holdings Inc. has acquired 15.1% of IMAREX ASA, the Norwegian financial derivatives exchange, from Frontline Ltd. for $52 million. IMAREX operates a hybrid electronic trading and voice brokerage and offers research, transaction and settlement services for financial derivatives based on oceangoing freight, airborne emissions, farmed salmon, electric power and heavy fuel oil.