Malaysia -London exchanges in talks

Bursa Malaysia is believed to be in preliminary talks with the London Stock Exchange to collaborate on the trading of each other's shares, according to sources.

Based on the concept of an international board which was mooted by the Prime Minister during the budget, the partnership would likely involve coming up with products and a platform for the trading of these shares.

When contacted, Bursa replied in a statement: “We are always open to exploring any potential collaborative initiatives with strategic benefits to grow our business.

A broker opined that it was high time for Bursa to link up with a major stock exchange like London, seeing the major consolidation moves among exchanges in the world.

In February, Deutsche Bourse launched a US$10.2bil takeover for NYSE Euronext to form the world's largest exchange operator.

Subsequently, Nasdaq OMX and IntercontinentalExchange bid with an offer of US$11.3bil in cash and stock.

According to The Telegraph last month, the London Stock Exchange reported a 90 percent jump in the number of new companies listing in 2010, with a total of 167 new listings taking place to the end of February,

Meanwhile, the amount of money raised by companies listing was more than three times higher than the previous year, at 9.8bil; UK daily trading activity was higher by 2% to 4bil and derivatives trading volumes increased by 12% over the period.

Local retail trading made up 20.58 percent in value last month but in volume terms, comprised 40.73 percent of the trading.

According to a source, the talks had begun about a year ago but the board of Bursa had wanted the change in CEO to take place before proceeding further.

Last Friday, the new CEO Datuk Tajuddin Atan who was helming the RHB banking group, took over from Datuk Yusli Mohd Yusoff whose contract has ended.

Reports in October last year quoted Yusli as saying that Bursa would set up an international board to allow the listing of foreign securities, which includes syariah-compliant products, to attract Asian investors.

Yusli had also assured that the local bourse would remain competitive despite the latest merger between the Singapore Stock Exchnage (SGX) and Australian Stock Exchange (ASX).

On October 25, the SGX offered to buy ASX in a cash-and-share transaction then valued at A$8.4bil, which represented a 42% premium to ASX's share price at the time, reported Bloomberg. Concurrently, the talks to initiate an Asean trading link between the stock exchanges of Malaysia, Singapore, Thailand and possibly the Philippines are still ongoing.

The aim at Bursa was for the trading link to go live by year-end, said a source.