(Adds details, valuation, background, trader comment)
By Blaise Robinson
PARIS, June 20 Shares in Euronext
started trading at 19.40 euros on Friday, 3 percent below the
price set for its initial public offering, signalling investor
doubts about the financial market operator's prospects as stock
trading volumes remain muted.
Parent Intercontinental Exchange had priced the
shares at 20 euros late on Thursday, at the lower end of a
previously announced IPO price range of 19-25 euros.
ICE said on Thursday that all 42.25 million shares offered
were sold, representing 60.36 percent of the capital, implying a
market value of 1.4 billion euros ($1.91 billion) for all of the
"Equity markets are at the bottom of a cycle right now in
terms of trading activity. Stock prices have been rising but
there's no volume," said David Thebault, head of quantitative
sales trading at Global Equities, in Paris.
"In this context, it's hard to get excited about Euronext's
business, the potential growth is tiny. There are better
investment ideas elsewhere, in the biotech space for instance."
ICE acquired NYSE Euronext in a $11 billion deal last year.
The U.S. exchanges group committed to spinning off Euronext at
Euronext - which has been battling with competitors such as
BATS Chi-X Europe to preserve its market share in Europe - has
said it plans to return to revenue growth over the next three
years, following declines in both 2012 and 2013.
Using a projection from Euronext's first-quarter net income
of $36 million over the full year, a share price of 19.40 euros
would imply a price-to-earnings (P/E) ratio of about 12.8,
according to Reuters calculations.
This compares with P/E ratios of 18 for the shares of UK
peer London Stock Exchange Group and 14.8 for German
rival Deutsche Boerse, according to Thomson Reuters
A group of European institutional investors bought a 33.4
percent stake in Euronext at a 4 percent discount to the IPO
price, or 19.20 euros a share, in a move designed to allay local
regulators' concerns that the pan-European bourse could be
snapped up by another foreign firm.
ABN AMRO Bank, JPMorgan and Societe Generale acted as joint
global coordinators for the IPO.
($1 = 0.7336 Euros)
(Editing by James Regan)