Asia’s oldest equity bourse Bombay Stock Exchange Ltd (BSE) has signed a memorandum of understanding (MoU) with Japan’s Osaka Securities Exchange Co Ltd (OSE) to create a co-operative relationship for the development of financial markets in India and Japan. As part of the understanding, both exchanges will seek to develop opportunities including cross-licensing of indices and other potential areas of co-operation.
This stops well short of an equity deal but comes at a time when several stock exchanges are globally looking at mergers and acquisitions. Only last week, Nasdaq OMX and IntercontinentalExchange had jointly launched an unsolicited bid for NYSE Euronext, which runs the New York Stock Exchange, among other bourses. At least two other deals are in the pipeline, including London and Canadian exchanges besides Singapore and Sydney bourses.
Although foreign investment restrictions in local stock exchanges would ensure that such deals may not happen anytime soon in India, BSE already has a broad shareholder base that includes two leading global exchanges, Deutsche Bourse and Singapore Exchange, as strategic partners.
“We believe that the signing of the MoU with the BSE, which is India’s largest stock exchange and has the well-known benchmark index Sensex, will be a significant step towards mutual co-operation of two exchanges,” said Michio Yoneda, president & CEO of Osaka Securities Exchange Co Ltd.
Osaka Securities Exchange is Japan’s largest derivatives exchange and operates Jasdaq. A year ago, OSE had merged operations with Jasdaq Securities Exchange Inc. and in October last year, it integrated Hercules (its existing growth market) and Jasdaq to form the new Jasdaq market with about 1,000 listed companies. OSE is the only listed exchange in Japan whose shares have been traded on its own market since April, 2004.
Madhu Kannan, MD & CEO of the Bombay Stock Exchange, said, “The signing of the MoU with Osaka Securities Exchange will help create a platform to facilitate wider investor access to world class investment products from both exchanges, a move which will be mutually beneficial to the exchanges and investors alike.”