CME Group Inc.
) unveiled new foreign exchange (FX) futures contracts in Indian
Rupee (INR) on its Globex platform. This is an attempt to take an
extra step of developing business into rapidly growing
The new INR futures will begin trading from January 28, 2013
onwards, subject to regulatory approval. On the same day,
) will begin trading its FX futures contracts in INR and
Brazilian Real, as announced last month. Consequently, both the
exchanges will become the first ones to offer futures contract in
INR in the US.
Meanwhile, CME Group will launch INR FX futures in
standard-sized and e-micro contract, which will be 20% of the
value of the standard contract. The notional value of a
standard-sized contract is pegged at INR5.0 million. Further,
this non-deliverable forward currency will be settled in cash and
will be hedged against the US dollar.
We believe that the accelerated demand for flexible and
capital-efficient exchange tools in the emerging economies are
paving way for diversified growth opportunities for the global
exchange giants. Further, the addition of INR FX futures
completes CME Group's FX futures' product suite, which now
includes currencies from all the BRIC (Brazil, Russia, India and
CME Group now leads the global derivative exchanges with
comprehensive product portfolio of 56 futures and 31 options
contracts, with an average daily notional value of US$110 billion
in 2012. Additionally, the company offers over-the-counter (OTC)
clearing services for 12 OTC non-deliverable forward currency
pairs along with 26 cash-settled forward contracts.
Going ahead, CME Group continues to strategize its product and
service offering to attain a strong foothold in the emerging
markets. The company has achieved a competitive leverage by
demonstrating immense growth potential in its futures and OTC
market as well. The introduction of new products is also crucial
for the company's core growth, which has been following the
ongoing weak industry trends.
Currently, the Zacks Consensus Estimate for the fourth quarter
operating earnings is pegged at 64 cents per share, which would
dip about 10% from the year-ago quarter. Over the last 30 days, 6
out of 14 analysts covering the stock have reduced their
estimates for the fourth quarter of 2012, while one upward
revision was witnessed. Subsequently, earnings estimate of $3.04
per share for 2012 exhibit a cautious outlook with an expected
year-over-year negative growth of 11%.
The company carries a Zacks #4 Rank that implies a short-term
Sell rating, while the long-term recommendation stands at
CME GROUP INC (CME): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
To read this article on Zacks.com click here.