Bursa-London Stock Exchange in collaboration talks

PETALING JAYA: Bursa Malaysia
is believed to be in preliminary talks with the London Stock Exchange
to collaborate on the trading of each other's shares, according to
sources. Based on the concept of an international board which was
mooted by the Prime Minister during the budget, the partnership would
likely involve coming up with products and a platform for the trading of
these shares. When contacted, Bursa replied in a statement: “We
are always open to exploring any potential collaborative initiatives
with strategic benefits to grow our business. “We believe that
alliances will work if the respective parties bring opportunities of
strength and knowledge to the table. However, as of today, there is
nothing to update the market,'' said a Bursa official. According
to a source, the talks had begun about a year ago but the board of Bursa
had wanted the change in CEO to take place before proceeding further. Last Friday, the new CEO Datuk Tajuddin Atan who was helming the RHB banking group, took over from Datuk Yusli Mohd Yusoff whose contract has ended. Reports
in October last year quoted Yusli as saying that Bursa would set up an
international board to allow the listing of foreign securities, which
includes syariah-compliant products, to attract Asian investors. Yusli
had also assured that the local bourse would remain competitive despite
the latest merger between the Singapore Stock Exchnage (SGX) and
Australian Stock Exchange (ASX). On Oct 25, the SGX offered to
buy ASX in a cash-and-share transaction then valued at A$8.4bil, which
represented a 42% premium to ASX's share price at the time, reported
Bloomberg. Concurrently, the talks to initiate an Asean trading
link between the stock exchanges of Malaysia, Singapore, Thailand and
possibly the Philippines are still ongoing. The aim at Bursa was for the trading link to go live by year-end, said a source. A
broker opined that it was high time for Bursa to link up with a major
stock exchange like London, seeing the major consolidation moves among
exchanges in the world. In February, Deutsche Bourse launched a US$10.2bil takeover for NYSE Euronext to form the world's largest exchange operator. Subsequently, Nasdaq OMX and IntercontinentalExchange rivalled that bid with an offer of US$11.3bil in cash and stock. According to The Telegraph
last month, the London Stock Exchange reported a 90% jump in the number
of new companies listing in 2010, with a total of 167 new listings
taking place to the end of February, Meanwhile. the amount of
money raised by companies listing was more than three times higher than
the previous year, at 9.8bil; UK daily trading activity was higher by 2%
to 4bil and derivatives trading volumes increased by 12% over the
period. “The exchange, which now faces competition in equity
trading from rival platforms for the first time in its history, also
said its proposed merger with TMX, the Toronto stock exchange, is
proceeding, with shareholder meetings to agree with the deal due to be
held in the summer,'' reported The Telegraph. On Bursa
Malaysia, foreign participation last month stood at 15.11% with a net
position of RM47.15mil (of RM361.79mil bought, RM314.61mil was sold);
local institution participation was at 49.22% with a net position of
minus RM31.08mil (of RM1.09bil bought, RM1.12bil was sold); local retail
participation was at 35.67% with a net position of minus RM16.1mil (Of
RM790.18mil bought, RM806.28mil was sold). In terms of the
RM40bil in value traded on Bursa, local institutions comprised the bulk
with 40.08% traded (14.6% of total volume of 28.7 billion shares traded
last month); this was followed by foreign institutions at 24.11% in
value and 7.79% in volume traded. Local retail trading made up 20.58% in value last month but in volume terms, comprised 40.73% of the trading