Crédit Agricole Cheuvreux publishes its April Market Indicators produced in conjunction with TAG.

Paris, le 25 May 2010

Crédit Agricole Cheuvreux publishes its April Market Indicators produced in conjunction with TAG.

Despite differences in the size of the operators, the market microstructure in Europe and US will continue to converge

Key findings for April:

• The main event in April was NASDAQ-OMX Europe's announcement that it is to close by the end of May. Despite the quality and the range of the services offered by the MTF, this step — coming on the heels of the move between the LSE and Turquoise — is a sign that it is not that easy to gain and maintain a place among European operators. In addition, BATS anticipates it needs 10% market share to break even.
• This also reminds us that there are more large operators (with more than 5% market share each) in Europe than in the US: there are seven independents in Europe — NYSE Euronext, LSE Group/Turquoise, BATS, Xetra, Chi-X, SIX, and NASDAQ-OMX – compared to four in the US — NYSE, NASDAQ, BATS, and Direct Edge. If we compare the two markets, it seems that Europe lacks dark pools (more than 40 in the US - around 10% of the market in all – vs a little less than 20 in Europe).
• However, the calls for responses from market participants from both the SEC in the US and CESR in Europe is proof that there are similarities between the two markets, mainly coming from the same exposure to high frequency trading Furthermore NYSE Arca Europe is trying to offer some US names in Europe and Turquoise is advertising a similar offer. Even if these steps seem to raise some clearing and settlement issues, it is another sign of how close the markets' microstructures are and that they will probably continue to converge.
• The market reacted as expected under increased volatility: the bid-ask spread widened, activity (the number of trades) increased and the percentage of presence at the EBBO globally decreased.
• Two main trends continue: on one hand, LSE's market share continues to decrease (by ca. 3.5%, shared between Chi-X and BATS), as does SIX's market share on the SLI 30 (by 2.2%, shared among Chi-X, BATS and Turquoise. On the other hand, Xetra's market share on the DAX is increasing following implementation of a new fee schedule in March (almost 2% captured from Chi-X).

Please see attached document ‘Market Indicators April 2010’ for more details.