NYSE to pursue further consolidation of global stock exchanges

Pushing for further consolidation of global stock exchanges, the NYSE Group said future alliances with leading Asian exchanges are possible. The CEO of Tokyo Stock Exchange has reportedly said that the Japanese exchange is willing to consider a partnership with the NYSE-Euronext combine in the future.

The NYSE Group may also consider a bid for one of the leading US-based commodity exchanges. This would expand its business to the more lucrative commodities business. Volumes are higher in commodities trading and exchanges like Chicago Mercantile Exchange are valued higher than the NYSE.

The CEO of NYSE also said the group would consider a new stock exchange in London if its merger with Euronext does not deliver the desired results. The prime driver for the proposed merger between NYSE and Euronext is the possibility of attracting international companies that are wary of a US listing because of tougher regulations.

However, Euronext does not have a presence in London, considered the financial capital of Europe. Overseas companies may prefer to have a listing in London because of its stature. Euronext has only a derivatives market in London with its cash market trading limited to Paris, Amsterdam and Brussels.

The NYSE CEO has also not ruled out a fresh bid for the London Stock Exchange. However this would be a difficult proposition as its rival US exchange, NASDAQ, currently holds more than 25 per cent of LSE, giving it the power to block any rival bids.

Meanwhile German stock exchange operator Deutsche Boerse is still pursuing its bid for multi-location European electronic stock exchange Euronext, even though the latter has accepted a rival bid from NYSE Group. Yesterday, it announced some structural changes to it's nearly $11 billion bid for Euronext, by dropping some of the conditions for a possible merger.

Though Deutsche Boerse has not raised the bid amount, analysts are not ruling out such a possibility in future. The German exchange is also counting on political support from French, German and Dutch governments for a pan-European merger between Deutsche and Euronext rather than a transatlantic merger between NYSE and Euronext. Euronext shareholders are yet to approve the merger with NYSE.