Osaka Securities Exchange Co (OSE) yesterday rallied the most since August after the Nikkei Shimbun said Tokyo Stock Exchange Group Inc (TSE) has entered late-stage takeover talks to buy the operator of Japan’s second-largest equities market.
Osaka Securities rose 7.3 percent to end at ¥391,500 (US$5,012). Tokyo Stock Exchange, a privately held company that runs the main venue in the world’s third-largest equity market, would offer to buy as much as 66 percent of the Osaka bourse, Nikkei said.
TSE has made no decision like that reported yesterday, the exchange said in a statement. Osaka’s bourse has made no decision on a merger, it said in a separate statement.
TSE president Atsushi Saito in March began talking publicly about a merger between Japan’s largest two bourses. A marriage would give the 133-year-old Tokyo exchange, home to Sony Corp and Toyota Motor Corp, access to OSE’s derivatives trading system with Nikkei 225 Stock Average futures. It may also cut computer system costs for both companies.
“From the point of view of efficiency, it makes sense for the OSE and TSE to bring their respective strengths in derivatives and stocks to a merger,” said David DeGraw, a director in electronic trading services for Daiwa Securities Capital Markets Co in Tokyo. “A merger would reduce IT [information technology] costs in the long term if the exchanges decide on a unified trading platform.”
More than US$30 billion in exchange mergers have been proposed worldwide since October last year. Cross-border deals have met resistance from shareholders and regulators.
Australia blocked Singapore Exchange Ltd’s bid for ASX Ltd on national interest grounds. A shareholder-approved merger between NYSE Euronext and Deutsche Boerse AG faces an anti-trust complaint from the European Commission. The complaint says the combined company would monopolize derivatives trading, according to a person familiar with the matter.
London Stock Exchange’s offer for Toronto-based TMX Group Inc was withdrawn because too few owners supported it. TMX’s board last month endorsed a rival bid from a group of Canadian banks and pension funds that seeks to merge TMX with two domestic trading platforms.
“Exchanges are consolidating,” said Ichizo Yamauchi, principal executive officer at Tokyo-based Kokusai Asset Management Co. “In that context, a merger between Tokyo and Osaka is an inevitable development.”
Tokyo Stock Exchange is valued between US$1.89 billion and US$2.52 billion, 1.5 to 2 times more than Osaka, which had a market capitalization of ¥98.6 billion at the end of last week, the Nikkei said. Added to Osaka’s market capitalization as of Friday, the combined company would have a value of US$3.15 billion to US$3.78 billion, the data show. That’s more than Chicago-based Chicago Board Options Exchange at US$2.46 billion and smaller than London Stock Exchange at US$3.79 billion.
Overseas investors made 61 percent of the trades on Japan’s top three exchanges in the week ended Oct. 28, according to TSE data. The Nagoya Stock Exchange is the country’s third-biggest bourse.
“In the current set-up, intensifying competition in terms of pricing and liquidity means that foreign investors will be moving their orders to Hong Kong or Singapore,” Yamauchi said. “There’s the danger that Japan will become a local market.”
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort