Nasdaq could benefit from LSE failure

Nasdaq could potentially benefit from its failed £2.7 billion hostile takeover bid for the London Stock Exchange (LSE).

The New York-based stock exchange had its bid for LSE rejected by shareholders last week, but analysts suggest that the move may have strengthened its position and Nasdaq is now understood to be pursuing international agreements with a number of other bourses.

Nasdaq, which owns almost a third of LSE, has very strong core business and the LSE stake could prove of strategic benefit to the exchange and its chief executive officer Robert Greifeld.

Reuters Knowledge reports that Nasdaq shares traded at 56 times earnings per share over the past 12 months, compared with 68 times for rival NYSE Group and 64 times for recently floated NYMEX Holdings.

The second largest US stock market has reported that fourth quarter earnings more than tripled during the last three months of 2006 as a result of higher trading fees and new business.

Net income for Nasdaq rose to $63 million in the fourth quarter, up from $17.1 million for the same period of 2005. Trading in he US increased by 14 per cent over the three months, while per-share profit was up from 15 cents to 43 cents.

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