The European stock exchange, Euronext NV, reported a 5.6% increase in second quarter revenue today.

The firm said revenue for the second quarter of 2005 reached 238.6 million euros, compared with 225.9 million euros during the same period in 2004. This improved quarterly performance was mainly due to the recovery in stock markets, it said. Still, for the first half of 2005, revenue is more or less flat, down 0.3% year over year.

New issuance activity remained alive, with 20 new listings in the quarter. Quarterly listing revenues were up 5.4% compared with Q2, 2004. “This positive trend in the IPO business since the start of the year has delivered a 18.7% revenue growth year-to-date and looks well set to continue,” it added, noting there is a good number of potential IPOs in the pipeline for this autumn.

Derivatives trading recovered a bit. The first quarter of the year was characterized by the lack of volatility, inducing a derivatives trading revenue decrease of 22%, it explained. But that picked up in the second quarter, enabling derivatives trading revenue to match year-ago levels. The growth generated by interest rate derivatives was offset by the impact of the fee reduction of equity options, implemented in November 2004, it noted.

Settlement and custody revenue totalled 13.6 million euros, up 27.7% compared with the same period last year. This activity was positively impacted by the rise of indices, influencing custody favourably, as well as the full effect of the tariff increase set up in April, 2004, and the launch of new products. However, the custody business has been cited by the UK’s competition regulators as a possible stumbling block in the proposed merger between Euronext and the London Stock Exchange.