Sin­ga­pore bourse ex­plor­ing pos­si­ble deals with for­eign ex­change op­er­a­tors

New Straits Times - - Business -


EVEN as reg­u­la­tors crack down on yet an­other round of con­sol­i­da­tion among ex­change op­er­a­tors, at least one ma­jor bourse is still keen to pur­sue deals.

Sin­ga­pore Ex­change Ltd (SGX), which runs South­east Asia’s largest stock and de­riv­a­tives mar­ket, had in re­cent months held ex­ploratory talks about pos­si­ble tie-ups with over­seas ex­change op­er­a­tors, said peo­ple fa­mil­iar with the mat­ter.

Dis­cus­sions with par­ties in­clud­ing Nas­daq Inc and CME Group Inc have ranged from po­ten­tial col­lab­o­ra­tions to the sale of a stake in the com­pany or even a full merger.

SGX, with a mar­ket value of about US$5.9 bil­lion (RM26 bil­lion), has been weigh­ing its op­tions as ri­vals at­tempt to con­sol­i­date. An out­right sale would be com­pli­cated as cross-bor­der deals be­tween ex­change op­er­a­tors at­tract in­tense scru­tiny from reg­u­la­tors.

Euro­pean Union reg­u­la­tors on Wed­nes­day blocked Deutsche Bo­erse AG’s US$14 bil­lion takeover of Lon­don Stock Ex­change Group Plc, adding to a long his­tory of failed merger at­tempts be­tween bourses.

Part­ner­ing with or ac­quir­ing a stake in SGX would give an Amer­i­can or Euro­pean ex­change stronger foot­ing in Asia as the fight for global cap­i­tal es­ca­lates.

The com­pany, with of­fices in China, Hong Kong, In­dia, United King­dom and Ja­pan, re­ported net in­come of S$349 mil­lion (RM1.1 bil­lion) last year, on to­tal rev­enue of S$818 mil­lion.

The av­er­age daily value of shares traded on SGX this year was about US$847 mil­lion, up 11 per cent from US$763 mil­lion last year. Still, that’s down from US$1.12 bil­lion a day in 2013.

The Sin­ga­pore bourse al­ready has an ex­ist­ing re­la­tion­ship with New York-based Nas­daq, which has a mar­ket val­u­a­tion of US$11.4 bil­lion and runs trad­ing venues in the United States, Europe and Canada. Nas­daq sells tech­nol­ogy to mar­ket op­er­a­tors in 50 coun­tries, and SGX is one of its cus­tomers.

In 2011, SGX’s A$8.35 bil­lion (RM28.2 bil­lion) bid for Syd­ney­based ASX Ltd was scut­tled by Aus­tralia’s gov­ern­ment. The deal would have cre­ated the world’s fifth-largest bourse op­er­a­tor at that time. Bloomberg

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