Deutsche Börse, NYSE eye Asia

Exchanges say their merger will position them well to partner with counterparts in Asia and other emerging markets

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Deutsche Börse and NYSE Euronext are targeting expansion in Asia, setting the stage for the creation of the first truly global exchange group.

The two bourses, which announced their merger yesterday, say partnering with an exchange in the fast-growing Asian market is the next step in their strategic plans.

Any tie-up that links the US and Europe with Asia is likely to be of interest to companies keen to expand their presence and shareholder base to eastern markets.

The desire of issuers to tap Asian markets has been underscored by recent moves in the depositary receipts (DRs) market, which saw Standard Chartered set up the first Indian DRs and Vale became the first company to list Hong Kong DRs.

Reto Francioni, chief executive of Deutsche Börse, said in a press conference that one reason for the merger is to better position the two exchanges to link up with an Asian partner. ‘You could say it’s an intermediate step to build this bigger company,’ he explained.

Duncan Niederauer, chief executive of NYSE Euronext, echoed these comments at the same press briefing. ‘What we’re doing is solidifying our positions in those two regions, which also positions us to be the inviter, if you will, the enabler, the convener with other exchanges in Asia and in the developing world down the road as we put this great company together,’ he said.

One bourse in Asia looking for a global partner is the Hong Kong Stock Exchange. Last week, HKEx put out a statement saying it was not in any talks but would consider alliances with its counterparts around the world.

‘Any alliance we pursue would need to present strategically compelling benefits consistent with our focus on markets in Greater China,’ added the HKEx.

Hong Kong is likely to be a key target of the new group formed by the merger of Deutsche Börse and NYSE Euronext. The Asian exchange was the biggest market for new listings in 2010, raising around $55 bn from IPOs.

Along with Deutsche Börse and NYSE Euronext, other planned mergers include the London Stock Exchange’s tie-up with Canada’s TMX Group and the Australian Stock Exchange’s combination with Singapore Exchange.