TSE bought 53 million shares in Singapore Exchange Limited (SGX), representing 4.99% of its capital for about S$528 million ($342 million) based on the closing price of the Singapore Exchange of S$9.95 on June 15. The shares had gained 1.5% during the course of the day.
TSE is now the largest private shareholder in the SGX.
In December 2006, the two exchanges announced plans to work more closely together with the TSE agreeing to license some indices to SGX to create products for trading on SGX. The exchanges also agreed at the time to explore the establishment of a trading and clearing link for both derivatives markets.
In a written statement, TSE says that, subject to receipt of regulatory approvals, it is keen to acquire additional shares so that it holds more than a 5% stake in SGX, adding that ôfor the time being, TSE has no intention to purchase SGX shares in excess of 5%ö.
At a subsequent press conference, TSE president Taizo Nishimuro is reported to have said TSE was considering "many possibilities" with the Singapore bourse and "the Singapore exchange holds a unique position in Asia. We believe Singapore can be the cornerstone of our Asian strategy".
CEO of the SGX, Hsieh Fu Hua, says: ôWe welcome this investment. We understand that it is long-term in nature, and endorses our role as an Asian gateway. We look forward to exploring opportunities for closer collaboration with TSE."
Stock exchanges around the world are consolidating both to facilitate easier cross-border trading but also to ensure that they have a foothold in the economies which are poised for high growth.
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