A plan to merge Japan’s two biggest stock exchanges has won regulatory approval, the bourses said yesterday, as Tokyo and Osaka team up amid stiff competition from overseas rivals.
The Tokyo Stock Exchange said it had received the green light from Japan’s Fair Trade Commission for its planned takeover of the smaller Osaka Securities Exchange.
The deal was expected to be completed next month, and the two bourses aimed to formally join their operations early next year, Japanese reports said.
The move comes amid an increasingly competitive landscape, with slowing growth and a strong yen taking a toll on the once red-hot Japanese market.
The benchmark Nikkei index at the Tokyo Stock Exchange, which peaked in the late 1980s near the 39,000 level, closed at 9,079.80 yesterday, less than a quarter of its December 1989 value.
The merger would create the world’s third-largest bourse behind leader NYSE Euronext and NASDAQ OMX Group.
The bourses hope that combining Tokyo, the center of share trading in Japan with leading names — including Toyota and Sony — and the derivatives trading focused Osaka bourse will save costs and boost Japan’s securities market.
Singapore and Hong Kong have emerged as key regional rivals, with Hong Kong leading the world’s market for initial public offerings (IPO) over the past few years. The Malaysian exchange is tipped to be Asia’s top IPO market this year, as it plays host to a pair of huge listings this year.
However, some mergers — such as a plan to join the London and Toronto exchanges — have been shut down largely on competition worries or shareholder disapproval.