Listen Live
     Hong Kong flag (centre-R) fluttering next to the Chinese national flag (centre-L) outside the stock exchange building in Hong Kong

    Hong Kong Stock Exchange Launches Takeover Bid For London Counterpart

    © AFP 2019 / PHILIPPE LOPEZ
    Business
    Get short URL
    by Demond Cureton
    4104
    Subscribe

    The exchange, one of the biggest in Europe, had plans to buy financial information provider Refinitiv for £21.9 to help the platform expand trading across multiple regions and currencies, potentially rivalling Bloomberg and others.

    The Hong Kong Exchanges and Clearing Ltd. has shocked markets after offering to purchase the London Stock Exchange Group Plc for £29.6bn.

    “Bringing HKEX and LSEG together will redefine global capital markets for decades to come,” HKEX CEO Charles Li said in a statement on Wednesday, adding that both exchanges had "great brands, financial strength and proven growth track records”.

    Mr Li said that the acquisition would "connect East and West" and offer customers "greater innovation, risk management and trading opportunities".

    He added: "A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the long-term resilience and relevance of London and Hong Kong as global financial centres.

    ​Following the news, LSE shares have jumped around 9pc.

    The HKEX said that both exchanges were "two of the world's premier market infrastructure businesses" which, when combined, would help "enhance and capture global capital and data flows".

    A HKEX spokesperson said: "The proposed combination would strengthen both businesses, better position them to innovate across markets and geographies, and offer market participants and investors unprecedented global market connectivity.

    HKEX also intends to apply for secondary listings of shares on the London Stock Exchange in what has been seen as a 'commitment to the UK' amid political turmoil with Beijing.

    At the time of the announcement, UK business secretary Andrea Leadsom had been speaking on Bloomberg TV and said that whilst the UK welcomed foreign investment, it would “look very carefully at anything that had security implications for the UK”.

    Further Implications for Mainland China

    According to Mr Li, Hong Kong's potential partnership with the LSE would "strengthen ties between the Uk and China," namely in economic and trade terms and ultimately benefitting Mainland China, Hong Kong, and the United Kingdom.

    Doing so would benefit Beijing by providing additional market support for internationalising the Yuan and opening its capital markets to foreign investment, as well as offering "interconnections" for stocks, bonds, indices and others, giving the Mainland further access to global financial infrastructure.

    The proposal was also a "vote of confidence in London and the United Kingdom's future role as a global financial centre," allowing the City to strengthen its position and benefit from markets across Asia, as well as boosting the Yuan's position as a major global reserve currency, Mr Li added.

     

    Related:

    Argentinian Stock Market Plummets Almost 14% Amid Economic Crisis
    US Stocks Fall 623 Points After Trump Orders US Companies to Move From China
    Asian Stocks Down in Early Monday Trading Amid Escalation of US-Chinese Trade War
    Hong Kong Stocks Soar Amid Reports of Formal Withdrawal of Extradition Bill
    Tags:
    data, trading platform, yuan, renmenbi, stock market, London Stock Exchange, Hong Kong Stock Exchange
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik