Amid a fresh wave of merger mania among the world’s exchanges, a new trend may be emerging that sees smaller as better. According to a recent Wall Street Journal article, some entrepreneurs are hoping to do to stock offerings what local farmers’ markets do to grocery shopping. By creating a local stock market, Lancaster, Penn. is hoping to give companies the opportunity to raise money from local investors, rather than depending on institutionals and big banks with the creation of LanX. (more…)
The trading world seems to be both expanding and contracting with the back-to-back announcements of two exchange group mergers. First is the London Stock Exchange (LSE) merging with the TMX Group, owner of the Toronto and Montreal exchanges. The combined market capitalization would be almost $7 billion. Next, the NYSE/Euronext and Deutsche Börse (DB), whose boards voted to merge on Feb. 15. That exchange could have a market capitalization of $24 billion. Derivative volume wise, it would mean about 5 billion contracts traded yearly, forming for the most part a single derivatives exchange in Europe. (See “Mega exchange on horizon?“) (more…)
We all knew it was a matter of time before all of the exchanges in the whole entire world began consolidating — which, of course, will one day lead to only two super exchanges — one in Europe and one in Chicago — that’s right, I said Chicago.
When the Chicago Mercantile Exchange’s (CME) merger with the Chicago Board of Trade (CBOT) became final, the warning signal for the “other” exchanges considering consolidation went up to ORANGE.
Now simply considering some type of strategic move is no longer acceptable—it’s time for action.
Rumors of an imminent announcement by OMX and LSE were followed instead by an announcement from OMX and Nasdaq – specifically, that OMX had agreed to be taken over by Nasdaq for nearly $4 billion. The deal makes sense on two fronts – first, OMX has a network of exchanges across Northern Europe and the Baltic region that have done exceptionally well in light of the small numbers of listings generated in those countries. Second – and perhaps more importantly – because both OMX and Nasdaq have had designs on the London Stock Exchange. Nasdaq has a 30% stake in the LSE, while OMX is majority shareholder in EDX, the joint derivatives venture that OMX and LSE run in London.
But now new reports are surfacing of a counter-offer from Dubai International Financial Center (DIFC), a state-run business park in the United Arab Emirates that owns the Dubai International Financial Exchange (DIFE). The man in charge of DIFE: former OM boss Per Larsson, who had been laying low since being squeezed out of OM after it merged with the Helsinki Exchange to form OMX. He took the Dubai job last year.
Larsson had taken over from OM founder Olof Stenhammar in the 1990s, and was an early mover on scores of innovations that have since become mainstream – among them the clearing of OTC products, which is EDX’s core business…
Some interesting rumors out of London this week focus on speculation of an impending ‘closer cooperation’ between Scandinavian exchange operator OMX and the London Stock Exchange (LSE). The two already cooperate in managing the EDX derivatives platform, and both have been linked to takeover bids from NASDAQ – one real, one fictional. Specifically, NASDAQ owns a stake in the LSE and has made no secret of its desire for the operation, while last month both OMX and NASDAQ denied reports in a Swedish newspaper that NASDAQ had made an offer for the Scandinavian exchange operator.
The most recent speculation began Thursday, when Clara Furse reportedly made an unscheduled meeting with top OMX management. Details are sketchy — and unconfirmed — but developments bear watching…
(by Steve Zwick in Germany)
