2006 Mid-Year Highlights
- Amex lists 33 new exchanged traded funds from 10 different issuers.
- Amex launches Remote Options Market-Making Program, selecting three of Wall Street's largest firms as Supplemental Registered Options Traders (SROTs).
- The Amex Composite Index (XAX) finished the first half of 2006 at 1,928.59, a 25% increase from the same time period in 2005.
- Amex lists 52 new structured products, bringing total listings to 382.
- Six Credit Suisse-advised closed-end funds voluntarily transfer from the New York Stock Exchange to the Amex.
- Neal Wolkoff testifies to Congress on (SOX), advocating relief for smaller companies.
- Amex enhances its automation for all products and prepares for the launch of AEMI, scheduled for the fourth quarter of 2006.
"The American Stock Exchange began its transformation a year ago and the new leadership has committed itself to improving the regulatory and technology areas of the Exchange as well as providing our customers with the best services to grow their businesses," said Neal Wolkoff, Chairman and CEO. "I am confident that the Amex will see greater accomplishments in the second half of the year with continued focus in product innovation and the expansion of all our business lines."
Equities
The Amex saw impressive growth in its equities business during 2005 and continued to grow this year with 37 new listings in the first half. The Amex also experienced a 30% increase in average market capitalization of new listings in the first half of 2006 compared to the entire year of 2005. The Amex saw a significant increase in the number of initial public offerings this year, with 16 IPOs, almost double last year's first six months. Volume in Amex equities rose to over 7.5 billion shares in the first half of the year, a 49% increase from the same time period in 2005.
During the first half of 2006, the Amex attracted a diverse range of new listings in a variety of exciting industries, including mining, financial services and energy. Among the Amex's international listings in 2006 were companies located in Hong Kong, the UK and Canada.
The Amex Composite Index finished the first half of 2006 at 1,928.59, a 25% increase from the same time in 2005 and up 9.6% since the start of the year. The XAX has surged 110% over the past five years and it was up 99% over the past three 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.
In May 2006, the Securities and Exchange Commission (SEC) approved Amex's initiative to allow companies listed on other markets to dual list their securities on the Amex at significantly lower initial and annual listings fees. The ability to dual list on the Amex will provide more companies the opportunity to take advantage of the specialist-auction market structure and the unique services available only at the Amex.
The Amex continued to take a leading role in speaking with policymakers on behalf of the small and mid-cap community on issues related to SOX and its impact on small companies. In June, Chairman Wolkoff was invited by a Congressional subcommittee to testify on SOX.
"We are pleased with the Amex's first half results and are confident that our equities business will continue to grow vigorously throughout the remainder of the year," said John McGonegal, Senior Vice President of Amex's Equities Group. "The Amex also continues to take an aggressive stance on behalf of the small-cap community by speaking to policy makers to modify Sarbanes-Oxley requirements for smaller companies."
Exchange Traded Funds
With the launch of 33 new ETFs from 10 different issuers in the first half of 2006, the Amex continued to lead the industry in ETF listings in the U.S. Total ETF listings on the Amex rose to 183 and total assets increased to $236 billion.
The Amex welcomed four new ETF issuers in the first half of 2006, including Deutsche Bank, which launched the DB Commodity Index Tracking Fund (Ticker: DBC), the first ever commodity index-linked fund to be listed on a U.S. stock exchange. The Amex also listed the United States Oil Fund, LP (Ticker: USO) from Victoria Bay Asset Management, LLC, the first ever crude oil-based fund, and the Market Vectors-Gold Miners ETF from Van Eck Global (Ticker: GDM), the first and only ETF in the U.S. that offers investors broad exposure to the gold-mining equity market. Most recently, the Amex teamed up with ProShare Advisors LLC to launch eight new innovative ETFs designed to make it easier for investors to get short or magnified exposure to an index.
The Amex also listed several new products from its long-standing partners. First Trust Advisors, L.P., iShares, PowerShares Capital Management LLC, Rydex Investments, State Street Global Advisors and Vanguard all launched new and exciting ETFs in the first half of 2006. These repeat relationships helped put the Amex on pace for a record-breaking year in ETF listings.
"This has been a very strong first half of the year for new ETF listings at the Amex," said Cliff Weber, Senior Vice President of Amex's ETF Marketplace. "The diversity in listings and issuers reflects Amex's position as the premier listing venue for ETFs."
Two of the new ETFs listed in 2006, the Market Vectors-Goldminers ETF and First Trust Amex Biotechnology Index Fund (Ticker: FBT), are based on Amex proprietary indexes.
Options
In the first half of 2006, the Amex options business met several key goals in its efforts to regain a more competitive position in the options marketplace.
In May, the Amex launched its remote options market-making program and selected three major Wall Street firms as SROTs to participate in the program: Citadel Derivatives Group, SLK-Hull Derivatives LLC, and Timber Hill/Interactive Brokers.
"We are proud to have such high-caliber names in the industry join the Amex's remote options market-making program. These options players are among the biggest and best in the industry and we are excited to have them on board," said Michael T. Bickford, Senior Vice President of Options. The firms have agreed to make two-sided markets for as many as 400 options products remotely.
Early in the year, upgrades to Amex New Trading Environment (ANTE), the Amex options trading platform, resulted in significant reductions in system latency and turnaround times. In addition, one of two new data centers was created to support ANTE and in the next few months, Amex will port the ANTE system out of SIAC to this new data center. For the options business, Amex is also building a new ticker plant to improve system performance and will introduce a FIX front end for more flexible order entry.
Since January, the Amex garnered a total of 99,016,164 options contracts traded, and an average daily volume of 792,129. In equity options trades, which make up the majority of the Amex's options trading volume, the Amex traded 93,892,340 million contracts and an average daily volume of 751,139.
Capital Markets
With 52 new structured products listed in the first half of 2006, the Amex Capital Markets Group is well positioned to list more than 100 new products for a record fifth consecutive year. The launch in February of a new innovative structured product, High Income Trigger Securities (HITS), has reinforced the Amex's leadership position as the premier destination for capital markets issuers, who rely on the Amex's expertise in the complex processes of designing, registering and listing new products. As of June 30, 2006, the Amex traded a total of 382 structured products.
Closed-End Funds
The Amex continues to successfully grow its closed-end fund business, gaining nine new listings with total assets of $2 billion in the first half of 2006. Total Amex closed-end fund listings rose to 150 with total assets of $30 billion.
The Amex was proud to welcome six Credit Suisse-advised closed-end funds that voluntarily transferred from the NYSE to the Amex, including: The Chile Fund, Inc. (Ticker:CH), Credit Suisse Asset Management Income Fund, Inc. (Ticker:CIK), Credit Suisse High Yield Bond Fund (Ticker:DHY), The Emerging Markets Telecommunications Fund, Inc. (Ticker:ETF), The First Israel Fund, Inc. (Ticker:ISL), and The Latin America Equity Fund, Inc. (Ticker:LAQ). These funds have a combined market capitalization of more than $1 billion and join Credit Suisse's The Indonesia Fund, Inc. (Ticker:IF), which has been listed on Amex since 2003. All Credit Suisse-advised closed-end funds are now listed on the Amex.
Other additions to the Amex's closed-end family in the first half of this year include the Clough Global Opportunity Fund (Ticker:GLO), year-to-date the largest closed-end fund IPO in the U.S., RMR Asia Pacific Real Estate Fund (Ticker:RAP) and the First Trust Tax-Advantaged Preferred Income Fund (Ticker:FPI).
Technology
The Amex made great strides in implementing its technology initiatives in the first half of 2006. The launch of AEMI is scheduled for the second half of this year, following approval from the SEC. As a result of the SEC's delay until February 2007 of the roll out of Regulation NMS, the Amex will launch a pre-Regulation NMS version of the AEMI electronic trading platform. AEMI will be a state-of-the-art trading platform that will unite the best qualities of electronic and auction markets.
In options, the Amex has made significant improvements this year to increase capacity, reduce latencies and overall turnaround times in the Amex New Trading Environment (ANTE) platform. The Amex has also spent a great deal of time and effort in building a new ticker plant to improve system performance and reliability to provide our options customers with a competitive trading platform. With AEMI's ability to trade multi instruments, the Amex expects to migrate options and introduce new products to the AEMI platform in the future.
"The AEMI trading platform will position the Amex to be among the most technologically advanced exchanges," said Antoine Shagoury, Amex's Chief Information Officer. "The technology improvements that have been implemented this year will add great value to the Exchange and I am confident that the industry will appreciate all our efforts to make the Amex an even more competitive marketplace."
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 188 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.
