With all the attention focused on major mergers and acquisitions among exchanges, it’s easy to forget that less committal cooperative alliances are proliferating across the globe, and have been for years.
What’s more, several of these alliances have borne fruit in the past year or so with joint venture projects between major and minor exchanges sprouting across Asia in
particular. And with the Tokyo Stock Exchange (TSE) taking steps to become a regional and global derivatives player, other exchanges realize they will have to make their alliances work if they are to compete.
All of which gives the current wave of alliances more credence than have the memorandums of understanding (MoU) that every exchange on the planet seems to have with one or more of the Chinese exchanges.
In June, Deutsche Boerse unveiled a comprehensive MoU with Taiwan’s entire exchange network: the Taiwan Stock Exchange, the Taiwan Futures Exchange and the Taiwan Depository & Clearing Corporation. The announcement has credence because Deutsche Boerse wants desperately to finally make one of its overtures work, and the Taiwanese need to build global alliances if they are to compete with the emerging Japanese behemoth.
And in Europe, the Warsaw Stock Exchange (WSE) is gradually emerging as the hub of a regional trading network made up of Central and Eastern European (CEE) exchanges. Through the past five years, the WSE has been locking horns with OMX for dominance of Eastern Europe, with OMX building a network across the north and WSE taking what it can down south, primarily in the form of alliances with the Bulgarian Stock Exchange and Slovenia’s Ljubljana Stock Exchange.
In May, the WSE announced it was negotiating a MoU with the Prague Stock Exchange and that it had forged an agreement to share listings with an exchange outside the European Union: the Ukraine’s First Securities Trading System (PFTS).
With the exception of WSE’s agreements in Bulgaria and Slovenia, none of these announced deals involves ownership stakes. The German-Taiwanese deal may never come to that, but WSE has made no secret of its plans to become the Euronext of the East, or until recently, to become literally Euronext East by joining the Paris-based modular giant.
