Bourses, take your partners
Like fashion, global stock market operators have to move with the times.
Thirty years ago, the focus was on replacing the trading floor with electronic trading systems. In Hong Kong the move went from blackboard and telephones to computers and later a system matching orders electronically.
Ten years ago, the trend was for bourse operators to list, so that the stock exchanges of Hong Kong, London, Sydney and Singapore are all now publicly traded.
Last year, the new flavour of the month was mergers. As part of that trend Hong Kong Exchanges and Clearing's long-term rival, Singapore Exchange, proposed to buy out the Australian Stock Exchange. Although the deal ultimately collapsed owing to political concerns, the pressure was on for regional bourses to get bigger by joining hands.
This year, the talk is about partnerships rather than mergers.
HKEx signed two memorandums of understanding last week. One, with Zhongguancun Science Park in Beijing, encourages enterprises based in the mainland's technology hub to list and raise funds in Hong Kong.
The other was with Kazakhstan's Eurasian Trading System Commodity Exchange, which trades physical and derivatives products in agriculture, energy and metals.
Earlier this month, Hong Kong Exchanges and Clearing teamed up with six other stock exchanges from the BRICS economies - Brazil, Russia, India, China and South Africa - to form a partnership to cross-list each other's benchmark index derivatives from next June.
In August, HKEx also announced it wanted to set up a joint venture with the stock exchanges in Shanghai and Shenzhen to develop index or equity derivative products.
It is important to note that all these agreements are not about mergers but alliances to develop products together.
Such alliances can in some ways be better than full-scale mergers, which are far more complicated, involving shareholder approval as well as political considerations.
HKEx is a publicly listed company, while Shanghai Stock Exchange and Shenzhen Stock Exchange are still wholly owned by the government. To combine such differently structured organisations would be a very complicated exercise.
Instead, an alliance is simpler and quicker, allowing potentially profitable products to be developed quickly.
Futures or options products in BRICS markets may not be very attractive to the local retail market, but professional investors who have international exposure could find them attractive.
Local retail investors may be more interested in futures products linked to the bourses in Shanghai or Shenzhen.
The problem is that two months after HKEx announced its plan to set up joint ventures with the two mainland bourses, we still have not heard anything about the tie up.
Let's hope this is not just empty talk.