The new alliances between the stock exchange operators of the world

The recently announced merger negotiations between NYSE Euronext and Deutsche Boerse come after a series of pan-European and cross-ocean alliances (which took place over the last decade), and which are now raising the question "what comes next?" The German Stock Exchange is one of the three largest exchanges in the world, and if the deal with NYSE Euronext goes through, it will become the number one in the world. Under the circumstances, experts are turning their attention to a potential next step: will we see the creation of a huge stock exchange that would include Asia as well?

Some analysts think that we will see a huge alliance that would include an Asian exchange. Other opinions expect that in the future, there will only be a few "mega-exchanges", like the one that would result from the NYSE Euronext - Deutsche Boerse alliance, and next to them there would be several hundreds of smaller players.

• Recent moves on the world market

Prior to the announcement concerning the NYSE Euronext - Deutsche Boerse combination, that would merge the stock markets with the derivatives trading platforms of the US, Germany, France, Holland and Portugal, another information attracted the attention of players in the field: "London Stock Exchange" (LSE), which operates the markets of London and Milan, will acquire "TMX Group", which operates the exchanges of Toronto, Montreal and Calgary. The trade is valued at approximately 3.2 billion dollars.

Also this year, the Istanbul Stock Exchange, announced it was taking the steps towards a potential sale, after becoming a company (since it currently runs as a professional organization). What"s more, the management of the Ankara Exchange does not rule out a potential acquisition of a stake in another stock exchange.

Last autumn, Singapore Exchange Ltd., which runs the Singapore stock exchange, announced it would take over ASX Ltd., the main stock exchange of Australia, in exchange for USD 8.3 billion. The new entity would be a competitor for the exchanges of Hong Kong and Tokyo. The deal is the first that took place between two exchange operators in the Asia - Pacific region and will be implemented in the second quarter of this year.

Between 2000 and now, acquisitions in the field amounted to almost 100 billion dollars, some of them being the acquisition of Euronext NV by the NYSE Group, and the acquisition of the Nordic markets of the OMX AB group, by Nas­daq Stock Market Inc.

It needs to be reminded that the Nasdaq made its exit from the LSE in 2007, as its stake was acquired by Borse Dubai.

• Will Asia consolidate?

The officials of the Hong Kong Stock Exchange recently said that they are open to making an alliance with an international partner. In turn, the management of the Tokyo Stock Exchange (which controls 4.99% of the Singapore Exchange), said that it was willing to make potential alliances, but is not currently involved in any such negotiations. So far, there are no important global alliances with the exchanges of Tokyo, Singapore or Hong Kong, but Asia is seen as a region that has a huge potential in this sector.

It is worth mentioning that last year, the value of the IPOs launched on the Chinese stock exchanges, including the one of Hong Kong, was almost three times as big as that of IPOs launched on the American exchanges, which shows that the Chinese market is becoming a global financial power. At the end of last year, British daily Financial Times announced, quoting information provided by "Dealogic", that the Hong Kong Stock Exchange attracted the most valuable IPOs, becoming a global center in the sector, with 52.8 billion dollars in 2010. At that time, American IPOs only amounted to 42 billion dollars. Chinese markets, Hong Kong excluded have attracted listings of 66.9 billion dollars.

Almost 190 companies, mostly small and mediums ones, succeeded in raising a combined 28 billion dollars by getting listed on the Shenzhen exchange, and 104 companies raised 12.9 billion dollars from the IPOs made on ChiNext.

"Rusal", the Russian aluminum giant, and "L"Occitane", French cosmetics distributor, were the first companies in their respective countries to get listed on the Hong Kong exchange last year, raising USD 2.2 billion and USD 700 million, respectively.