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The Bank of New York Mellon Corp. (NYSE: BK) has become a minority equity investor in International Derivatives Clearing Group (IDCG), the derivatives clearing unit that's a subsidiary of Nasdaq OMX Group (NASDAQ: NDAQ). Financial terms of the deal were not disclosed, nor was the size of the stake -- but it's definitely a symbiotic pact. IDCG will use securities servicing products provided by the bank, and Bank of New York Mellon's chief executive of broker-dealer services, Art Certosimo, will join IDCG's board.
"This strategic partnership with Nasdaq OMX provides our buy side and sell side clients with a flexible platform that meets their derivatives trading, clearing and servicing needs," stated Bank of New York Mellon President Gerald Hassell. Bob Greifeld, CEO of Nasdaq OMX, added that the partnership "lends support to President Obama's proposed reforms of the [over-the-counter] derivatives market."
In other Bank of New York Mellon news hitting Wall Street this morning, UBS analyst Glenn Schorr resumed coverage of the stock with a Neutral rating. In a note to clients, Schorr commented, "We think the brokers are in better relative shape than many financials given healthy capital and liquidity positions, less direct credit exposure, an improving funding outlook, and their leverage to a rebound in capital markets activity."
Bank of New York Mellon is struggling this morning, succumbing to widespread weakness in the broader equities market. The stock is currently pinned in a tight trading range between round-number resistance at $30 and tenuous support from its 50-week moving average. This formerly resistant trendline has been toppled during each of the previous two weeks, but its strength as a technical foothold hasn't yet been proven.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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