Singapore exchange rules out further takeover bids

[September 21, 2011]  HONG KONG (AP) -- Singapore's stock exchange is not looking to takeover any of its competitors following its failed bid for Australia's bourse earlier this year, its chief executive said Wednesday.

Magnus Bocker, who has tried to make the Singapore stock market a finance powerhouse in Asia since becoming CEO in December 2009, said the company would focus on growth in its Southeast Asian neighborhood.

"The Singapore Exchange is not sitting here with a lot of money looking for the next deal, not at all," said Bocker.

He said the wave of U.S. and European stock market takeovers earlier this year was driven by pressure from shareholders to increase their return on investment by cutting costs.

But Asian stock exchanges have a lot more space to grow before they need to do the same, Bocker said. Singapore's takeover bid was not driven by cost cutting but by the opportunity for faster growth, he said.

"I don't see that there will be that many Asian mergers to create broader value to shareholders. We are many years before we are there," Bocker said.

Australian officials rejected the Singapore stock exchange's $8.3 billion takeover bid in April, saying it would not be in the nation's interest.

It was one of a number of attempted stock market combinations this year.

Deutsche Boerse AG is in the process of combining with NYSE Euronext, which owns bourses in Paris, Lisbon, Brussels, Amsterdam and New York, to create the world's biggest exchange operator. Nasdaq also tried to buy NYSE Euronext but dropped its attempt in mid-May

A group of financial institutions and pension funds is trying to buy TMX Group Inc., Canada's largest exchange operator, after a failed bid to combine with the London Stock Exchange.

U.S. and European exchange operators have been under intense pressure to join forces because technology has driven down the cost of trading to almost nothing -- making the business of operating an exchange less profitable. Stocks have also become a smaller part of the trading business. Exchanges are making more of their money from options and more complex derivatives.

Charles Li, the chief executive of Hong Kong Exchanges and Clearing Ltd., which operates the city's stock exchange, also ruled out buying competitors.

"At this point, I don't see us adding any value to anybody else. I don't see anybody adding value by entering into any equity mergers, any transactions," he said. Bocker and Li spoke at a panel discussion in Hong Kong.

Li said growth for the Hong Kong exchange would come from further loosening of restrictions on investors from mainland China, which would draw more big foreign companies to list.

[Associated Press; By KELVIN CHAN]

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