Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange June 1, 2011. REUTERS/Remote/Amanda Andersen (GERMANY - Tags: BUSINESS) *** Local Caption *** BER604_GERMANY-_0601_11.JPG
Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange June 1, 2011. REUTERS/Remote/Amanda Andersen (GERMANY - Tags: BUSINESS) *** Local Caption *** BER604_GERMAShow more

Markets burning with merger fever



The world's stock exchanges are swimming in an alphabet soup of takeover and merger activity.

Clash of the Titans The major players in the global markets battle.

Nasdaq OMX The market, based in New York, specialises in technology stocks and is in partnership with the organisation that runs several Scandinavian and north European exchanges.

NYSE Euronext The traditional Wall Street "big board" exchange owns the markets of Amsterdam, Paris and Brussels.

Deutche Boerse The German stock exchange, based in Frankfurt, owns the important Clearstream clearing system. It is in merger talks with NYSE.

LSE The London Stock Exchange, once the premier market in Europe, is now in alliance with the Italian exchange as well as with exchanges in India and Mongolia.

HKEC Hong Kong Exchanges and Clearing is the biggest exchange organisation in the world and has so far been watching the takeover battles from the sidelines.

TMX The organisation, which runs the Toronto and Montreal exchanges, is in bid talks with the LSE.

NYSE Euronext is looking for EU approval for its merger with Deutsche Boerse, after the US blocked a bid from its rivals Nasdaq OMX and Ice; the UK's LSE is having a hard time clinching an agreed deal with TMX of Canada, with the country's banks opposed to the transaction.

In the East, Singapore's SGX failed in a bid to take over Australia's ASX after regulators in Canberra came out against the merger, while all eyes are on HKEC, the giant of the Asian market centred in Hong Kong.

The wave of merger activity that has swept global stock exchanges is the result of several factors coming into play at once.

"Money is international, but exchanges are local," says Jeff Singer, the chief executive of Nasdaq Dubai. "In an increasingly globalised world, investors can move money around easily, so cross-border mergers make sense to facilitate the flow of funds."

Several other factors are also prompting the urge to merge among global exchanges.

Most are now quoted legal entities, rather than mutual organisations, as they predominantly were 10 years ago. The corporate Darwinism of business - take over or be taken over - applies to them now.

Finally, the importance of economies of scale and technology are coming to the fore. Modern trading and settlement platforms can handle billions of trades a day. It is inefficient if a mere couple of million are going through instead.

The imperative is to get bigger, and especially to put more high-margin derivatives trade through the system. Exchanges are also looking increasingly to own the back-room clearance and settlement systems that are essential to efficient securities trading.

The other way of looking at the bout of merger activity is as a battle between alliances of different European and North American exchanges to see which will dominate the huge volumes of share business generated in western capital markets.

"It's all about who gets the transatlantic business," says a market operator who asked to remain unnamed. "Whoever wins that will be in pole position to take on Asia, but only if the US and European markets are locked up first."

The two big players, NYSE Euronext and Nasdaq OMX, are already the result of US-continental mergers, and some see the current battles as just the latest round in north Atlantic consolidation.

But so far, the regulator in each of those markets has not been inclined to let the big, aggressive market players have it all their own way. Some even talk of a "new era of protectionism" in global stock exchanges, which may make all the recent merger activity ultimately irrelevant.

The first big casualty of the regulatory rigidity has been Nasdaq OMX, under its combative chief executive Robert Greifeld. Although his counter-offer to the terms of an agreed merger between NYSE Euronext and Deutsche Boerse was worth more, the US authorities thought merging the two main New York markets would be anti-competitive and blocked the deal.

Mr Greifeld "is not used to giving up easily, and the department of justice ruling was a big blow. He will have something else up his sleeve", says an acquaintance.

The "something else" could involve the other big transatlantic merger currently being planned. The London Stock Exchange (LSE) has for the past few months been trying to pick its way through the increasingly protectionist apparatus of Canadian business affairs to conclude a deal with TMX, the organisation that runs the Toronto and Montreal exchanges.

That agreement, initially hailed by the LSE as a transformative deal that would create a new force in global securities trading, has been regarded increasingly sceptically. Critics say it would make London a market for natural-resources stocks rather than a true global exchange, while some Canadians have grown alarmed that their markets would effectively be run from London.

The merger has run into opposition from Canadian politicians and regulators, while the country's banks have mounted a rival bid, worth more than the LSE deal but so far rejected by TMX. The chances of the LSE-TMX tie-up reaching consummation are getting slimmer by the day.

According to analysts, Mr Greifeld sees the opportunity that would arise for him should the Canadian deal collapse for LSE. Nasdaq tried to take over the LSE a few years ago, when the shares were much more expensive than they are today.

"He has his second opportunity in a lifetime," says a share analyst based in London.

LSE shares are seriously reflecting the possibility of a counter-bid for the LSE from Nasdaq. In the doldrums after the Canadian merger was announced, they have caught takeover fever in the past couple of weeks and are now near a high for the year.

A Nasdaq bid for the LSE would face scrutiny from LSE shareholders as well as from UK and European regulators. But it would give Mr Greifeld the big foothold in Europe he needs to complement the Scandinavia-based OMX.

If structured properly, the bid could be presented as a competitive counterweight to the NYSE-Deutsche Boerse tie-up, say industry observers.

Perhaps the momentum of the merger activity in global exchanges has temporarily stalled, but the commercial and technological logic is still regarded as inexorable, whatever the regulators say.

COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EAlmouneer%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Dr%20Noha%20Khater%20and%20Rania%20Kadry%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EEgypt%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E120%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3EBootstrapped%2C%20with%20support%20from%20Insead%20and%20Egyptian%20government%2C%20seed%20round%20of%20%3Cbr%3E%243.6%20million%20led%20by%20Global%20Ventures%3Cbr%3E%3C%2Fp%3E%0A
SERIES INFO

Schedule:
All matches at the Harare Sports Club
1st ODI, Wed Apr 10
2nd ODI, Fri Apr 12
3rd ODI, Sun Apr 14
4th ODI, Sun Apr 16

UAE squad
Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed

Zimbabwe squad
Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura

The specs

Engine: 3-litre twin-turbo V6

Power: 400hp

Torque: 475Nm

Transmission: 9-speed automatic

Price: From Dh215,900

On sale: Now

GRAN%20TURISMO
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Neill%20Blomkamp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20David%20Harbour%2C%20Orlando%20Bloom%2C%20Archie%20Madekwe%2C%20Darren%20Barnet%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
LA LIGA FIXTURES

Friday Athletic Bilbao v Celta Vigo (Kick-off midnight UAE)

Saturday Levante v Getafe (5pm), Sevilla v Real Madrid (7.15pm), Atletico Madrid v Real Valladolid (9.30pm), Cadiz v Barcelona (midnight)

Sunday Granada v Huesca (5pm), Osasuna v Real Betis (7.15pm), Villarreal v Elche (9.30pm), Alaves v Real Sociedad (midnight)

Monday Eibar v Valencia (midnight)

The specs

  Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now

MATCH INFO

Uefa Champions League last 16, first leg

Liverpool v Bayern Munich, midnight, Wednesday, BeIN Sports

Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5