JEG could help kick-start Japan’s stagnant financial system
On track to form the world’s third largest bourse, the TSE-OSE merger is also expected to result in cost savings of $89 million a year. August 28, 2012 | Levina LimThe finalisation of Tokyo Stock Exchange’s (TSE) $1.1 billion public tender offer for a 67% stake in Osaka Securities Exchange (OSE) marks an important stage in a deal expected to further drive Japan’s financial position and enhance its competitiveness in the international market. The new entity, Japan Exchange Group (JEG), will form the world’s third-largest exchange after NYSE Euronext and NASDAQ OMX. The merger was sealed after months of negotiation amidst a backdrop of uncertainties, primarily to allay concerns of the country’s competition watchdog, the Japan Fair Trade Commission. Osaka shareholders are expected to approve the merger at a meeting later this year. The approval of the merger represented a major hurdle crossed – one that has proven to be the bane of similar endeavours. Singapore Exchange’s (SGX) bid for Australian Stock Exchange was thwarted due to concerns of compromising Australian national interests, while a merger between NYSE Euronext and Deutsche Boerse AG (an alliance which would have formed the world’s largest exchange) was blocked by the European Commission for potentially creating a "near monopoly” in exchange traded derivatives. Soon after the announcement of the decision, Reto Francioni, chief executive of Deutsche Boerse AG said, “This is a black day for Europe and for its future competitiveness on global financial markets. “What comes now is a bitter race by all exchange sites, including those in Asia, for the best positioning.” The marriage between TSE and OSE is expected to stimulate Japan’s economy – which it arguably never recovered since its “lost decade” in the 1990s, where a burst of the country’s asset price bubble sent real estate prices slumping. Two decades of slow economic growth and recession ensued, as China overtook Japan’s position as the world’s second-largest equity market in 2008. Since then, Japan has been described to exhibit the “diminished giant syndrome”... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Exchanges, Markets & ExchangesExchanges,Markets Exchanges, Exchanges,Markets & Exchanges, Keywords:OSE, TSE, JEG, NYSE Euronext, Nasdaq OMX, JFTC, Atsushi Saito, SGX, ASE, Deutsche Boerse AG, SEHK OSE, TSE, JEG, NYSE Euronext, Nasdaq OMX, JFTC, Atsushi Saito, SGX, ASE, Deutsche Boerse AG, SEHK
|