The Singapore Exchange (SGX) says it has agreed in principle to buy a stake "of at least 95%" through the subscription of shares in the Singapore Commodity Exchange (Sicom) in a deal worth around S$7.5 million.
Sicom provides a marketplace for commodity futures, focusing on rubber. Its computerised trading network links market-makers and brokers, providing them with a price discovery system. Futures contracts transacted between buyers and sellers are cleared through Sicom's clearing house.
The acquisition - subject to regulatory approval and the consent of Sicom's shareholders - is expected to be completed by the end of June 2008.
Commenting on the deal, Hsieh Fu Hua, CEO, SGX, says: "Sicom is a well-known exchange in the international rubber business, with an established base of market participants. SGX has the systems and clearing capabilities, international membership and resources to enhance economies of scale and facilitate growth."
Both exchanges have recently signed deals with Swedish technology group and exchange operator OMX. Sicom is rolling out a new Web-based trading and clearing platform for commodity derivatives which is slated for launch in Q3 2008.