2005 Mid-Year Highlights
- Neal Wolkoff appointed Amex Chairman and Chief Executive Officer.
- New Board of Governors elected in April.
- Amex lists 49 new companies in the first half of 2005, including nine initial public offerings.
- Exchange traded fund listings increase to 164 with the launch of 20 new ETFs.
- Amex lists 67 new structured products, bringing total listings to 351.
- Amex designs Alternative Trading System (ATS), a completely re-designed state-of-the-art trading platform scheduled to launch in the first quarter of 2006.
- Amex receives the first two out of nine releases of application software for ATS.
"By following our detailed strategic vision, the Amex has made significant progress in all areas," said Neal Wolkoff, Chairman and CEO. "We have an enviable business model that includes four distinct lines of business: equities, ETFs, options and structured products. While there is much to accomplish in the second half of 2005, I am confident that our strengths as an innovator for new product development and a premier venue for listings will be recognized by our customers."
New Leadership
Neal Wolkoff was elected Amex Chairman and CEO in April 2005 after serving as Acting CEO since January. Earlier that month, a new Amex Board of Governors was appointed with the election of 14 new officers. This is the first elected Amex Board since the sale of the Amex in December 31, 2004, which transferred control of the American Stock Exchange from the NASD to The Amex Membership Corporation.
"This is an exciting time at the Amex and I am proud to be leading the Exchange during this period of extraordinary change. We are working with a clear focus to make sure that the Amex is on a growth path and I am committed to making it the highest quality marketplace," said Mr. Wolkoff.
Equities
The American Stock Exchange ended the first half of 2005 with 49 new company listings; roughly equal to the first half of 2004. The Amex also experienced a significant increase in the number of initial public offerings, with nine IPOs taking place in the first half, as compared to ten during all of 2004. The average market capitalization of new listings rose by 12% in the first half of 2005.
The American Stock Exchange Composite Index (XAX) finished the first half of 2005 at 1544.41, an 8% increase since the start of the year and up 24% from the same time in 2004. The XAX has surged 73% over the past three years and it was up 65% over the past five years, outperforming the Nasdaq Composite Index, the New York Stock Exchange Composite Index, the Russell 2000 Index, the Standard & Poor's 500 Index and the Wilshire 5000 Index during the same period.
"We are pleased with the Amex's first half results, in light of the challenges facing the broader marketplace," said John McGonegal, Senior Vice President of Equities at the Amex. "We are optimistic that, given the pace of new business, the Exchange will finish the year equaling or exceeding last year's listing numbers. We are well positioned for the future."
Exchange Traded Funds
With the launch of 20 new exchange traded funds in the first half of 2005, the American Stock Exchange solidified its dominance in the ETF marketplace, with more than 85% of all ETF listings in the U.S. Amex ETF listings rose to 164, and total assets increased to $210 billion, up 16% over the same period a year ago.
The Amex's collaboration with Rydex, PowerShares, and Vanguard continued this year, as each firm has chosen to list all of their ETFs on the Amex. Rydex Funds listed its second ETF on the Amex, the Rydex Russell Top 50 ETF, while Vanguard launched three new VIPERs, bringing Vanguard's total number of ETFs listed on the Amex to 23, and PowerShares launched 15 new ETFs, for a total of 19 funds listed on the Amex. Barclays Global Investors raised the total number of iShares listed on the Amex to 82 with the launch of the iShares COMEX Gold Trust, an ETF that tracks the price of gold bullion.
Cliff Weber, Senior Vice President of the Amex's ETF Marketplace, said, "We look forward to working with our partners to bring new ETFs to the marketplace. The continued strong growth of ETFs is evidence that investors have embraced these versatile tools."
The Amex also launched nine new Intellidex Indexes, more than doubling the number of Intellidex Indexes calculated by the Amex. Eight of these new indexes, the first Industry Group Intellidex Indexes that the Amex introduced in connection with a new agreement with Revere Data LLC, serve as the benchmarks for the latest ETFs offered by PowerShares.
Options
The Amex options business continued to face challenges, but the Exchange has undertaken great efforts to enhance its technological capabilities, which will lead to improvements in its ability to compete for order flow. Currently, the Amex is developing a system of remote quoting and a price improvement auction. The remote quoting program was approved by the Board of Governors in April, and will allow quotes to be entered electronically from outside the Exchange. The Amex is also upgrading the performance on the Amex New Trading Environment (ANTE), its electronic trading platform for options, and plans are underway for price improvement mechanisms within ANTE.
During the first six months of the year, Amex's equity options market share was 15.6%, compared to 18.5% during the same period in 2004. Amex options volume during the first half of the year was 786,017 contracts per day versus 810,046 during the first half of 2004.
"While the options industry is being transformed by technology and increased competition, the Exchange is moving quickly to ensure that our options business fully embraces the future. We are confident in the Amex's ability to meet the challenges posed by changes in market structure and increased electronic trading,' said Michael T. Bickford, Senior Vice President of Options.
Capital Markets
Extending its impressive performance from last year, the structured products group solidified its position as one of the key drivers of growth at the Amex. As testament to the Exchange's status as the listing venue of choice for structured products, the Amex saw 67 new products listed in the first half of 2005, up from 61 during the same time frame for 2004. We are also awaiting regulatory approval for one new product filing. As of June 30, 2005, the Amex traded a total of 351 structured products.
Closed End Funds
The Amex continues to build its closed-end fund business, with three issuers returning to list their new closed-end funds on the Amex in the first half of 2005. RMR Advisors added its fourth closed-end fund with the launch of RMR Preferred Dividend Fund; ALPS Mutual Fund Services, Inc. sponsored its third listing, Clough Global Equity Fund; and Gabelli Funds returned to list its second fund, The Gabelli Global Gold, Natural Resources and Income Trust.
These firms are among 35 leading closed-end fund issuers who have chosen to list their funds on the Amex, contributing to its rank as the second largest closed-end fund exchange in the U.S., with 149 listings as of June 30, 2005. In the past 4 years, the Amex more than doubled its closed-end fund listings--the largest percentage increase of any U.S. exchange--with total assets exceeding $25 billion.
Technology
The Alternative Trading System (ATS) is Amex's completely re-designed state-of-the-art trading platform that is scheduled to launch in the first quarter of 2006 with trading in equities and ETFs. ATS will unite the best qualities of the electronic market and the auction market. During the first half of 2005, the Amex received the first two out of nine releases of application software for ATS and it has begun showing ATS to the trading floor. "Improving technology has been a top priority under the new leadership. With the development and implementation of ATS, I believe that the Amex has positioned itself to be a leader in the industry," said Antoine Shagoury, the Amex's Chief Information Officer.
About American Stock Exchange
The American Stock Exchange® (Amex®) is the only primary exchange that offers trading across a full range of equities, options and exchange traded funds (ETFs), including structured products and HOLDRSSM. In addition to its role as a national equities market, the Amex is the pioneer of the ETF, responsible for bringing the first domestic product to market in 1993. Leading the industry in ETF listings, the Amex lists 164 ETFs to date. The Amex is also one of the largest options exchanges in the U.S., trading options on broad-based and sector indexes as well as domestic and foreign stocks.
