The London Stock Exchange (LSE) yesterday received a setback from Qatar, which has agreed to the deal for rival exchange operator NYSE Euronext.
London has been negotiating for 18 months a similar contract with Qatar, which has taken a 15 per cent stake in the LSE.
It is not clear what will happen to the Qatari stake in the LSE, which has been the subject of various bids and takeover approaches in recent years.
The deal also has implications for the Dubai International Financial Exchange (DIFX), which has not yet managed to attract significant investor interest. The deal paves the way for cross-listing opportunities between NYSE Euronext and the DSM.
“The aim is to develop a pipeline of IPOs and listings,” including by companies from outside the Gulf region, said John Al Khair, an adviser to the Qatari prime minister.
“The strategic partnership will provide Qatar with total market infrastructure capability and the opportunity to reinforce the country’s position as a regional capital market with the introduction of new trading products, technology and international investors and issuers,” a statement revealed.
Both Borse Dubai and DIFX declined to comment.
“Doha had to be the choice as Dubai has already chosen OMX and Nasdaq,” said an analyst.
On the other hand, experts at NYSE Euronext believe that this relationship will help DSM become an internationally integrated exchange international stock market from being just an optional one.
“We chose to partner with Doha because of its increasingly important role in the Gulf region and its enormous potential for growth,” Serge Harry, Group Head of Strategy and member of the Management Committee – NYSE Euronext told Emirates Business.
Borse Dubai had some time back acquired stakes in OMX and Nasdaq.
The Abu Dhabi Securities Market (now ADX) was the latest to form a strategic alliance with an international name, signing an agreement with NYSE Euronext in March of this year.
ADX and Abu Dhabi government have not taken an equity stake in NYSE Euronext, but are hoping that it can bring its expertise to the exchange.
The partnership between NYSE Euronext and DSM could potentially have an impact on the DIFX, the only international stock exchange in the region, which is still evolving.
Harry, however, downplayed such fears when asked if he noticed the DIFX and the DSM competing against each other.
“There is potential scope for more than one international stock exchange in the region,” he told Emirates Business.
“If you look at other parts of the world, many international stock exchanges are flourishing within one particular region,” he said.
The strategic partnership will transform the Qatari stock exchange into a significant international player in the global exchange space – helping in strengthening the position of Qatar as small, rich and powerful nation, much on the lines of Switzerland.