25 April 2014

Fidessa Fragmentation Index

Steve Grob - Fidessa

94 | posts 285,539 | views 3 | comments

Too close to call - er, maybe not then

30 June 2011  |  4594 views  |  0

So the LSE/TMX deal is no more – it is deceased, it is an ex deal.  Last night the LSE broke off talks with Canada’s TMX group as it became obvious that their proposed merger was never going to get the required support of TMX shareholders.  So, if you include recent events in Australia,  the latest score is National Self Interest 2 – Common Sense nil.  So, what now – is the LSE pining for another deal and will the Maple Group bid go ahead or will it be left to expire (arguably having done its job)?  And, what are the implications for BATS/Chi-X and the NYSE Euronext/Deutsche Börse – will their merger deals be left pushing up the daisies too?

It’s interesting that in both cases the management  behind the exchanges being “acquired” were 100% behind getting together with a bigger partner so as to achieve operational scale and global reach.  This tells you that they understand that, in the exchange world, you simply cannot hold back the tide of globalization, and so it would seem inevitable that they and other national stock exchanges will end up doing deals of some sort or another (and maybe on less favourable terms).  As for NYSE Euronext and Deutsche Börse – it’s significant that there has been barely a mutter of nationalistic outcry on either side of the Atlantic.  Maybe they get it – and, more importantly, see the potential in being the first exchange group to achieve real global operating scale.

For the LSE it’s not a question of it “being in play” but that it simply has to get bigger and quickly.  Given its ambitions in the derivatives arena, maybe Xavier will be booking flights to Chicago in the not too distant future.  The CME has been pretty quiet on the merger front since it swallowed its neighbour and arch rival on LaSalle Street – the CBOT.  A tie up between the two would create some interesting multi-asset and operational synergies, especially in global clearing and transatlantic trading.

Whatever happens, those exchanges (or their shareholders) that continue to nail their strategy to the perch of nationalism may find that they get left behind and end up scrabbling for partners when all the juicy deals have gone.

TagsDealing roomsTrade execution

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Latest posts from Steve

Maybe markets are unfair, but are they rigged?

02 April 2014  |  1332 views  |  3  |  Recommends 0 TagsTrade execution

The Twilight Zone

05 February 2014  |  1700 views  |  1  |  Recommends 0 TagsTrade executionRisk & regulation

The Watchman's Rattle - financial regulation in 2014

22 January 2014  |  1066 views  |  0  |  Recommends 0 TagsTrade executionRisk & regulation

Ready, SEF, go

14 January 2014  |  1459 views  |  0  |  Recommends 0 TagsTrade executionRisk & regulation

Dumb and even dumberer

25 October 2013  |  1805 views  |  0  |  Recommends 0 TagsTrade executionRisk & regulation
name

Steve Grob

job title

Director of Group Strategy

company name

Fidessa

member since

2009

location

London

Summary profile See full profile »
I am responsible for strategic development at Fidessa. This includes the development of new geogr...

Steve's expertise

What Steve reads
Steve writes about

Who is commenting on Steve's posts

Ketharaman Swaminathan
Tom Saar
Peter Fredriksson
Erik Bogaerts
Gary Wright
Neil Crammond