HUNGRY FOR TIE-UPS
Singapore bourse exploring possible deals with foreign exchange operators
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