The number of futures exchanges in the world is expected to drop from 50 to 15 in the next 10 years as a result of intensifying competition, which will in turn spark mergers and alliances, according to futures exchange chief executive Randy Gilmore. The Hong Kong exchange will participate in this process and fully expects to seek alliances to ensure it is among the 15 surviving exchanges, Mr Gilmore said yesterday in a lunch speech. 'There are 50 futures exchanges across the world, that is too many,' he said. 'Many of them are too small, too slow and too expensive. Many will wither on the vine.' 'Survival and success will come out of consolidation and automation.' He expected some exchanges to merge during the next few years, firstly in Europe where currencies have been unified. He said in the Asia-Pacific region, there would be only five exchanges in 10 years time and the Hong Kong Futures Exchange would be one of them. 'I think the futures exchanges of Japan and Sydney will be there,' he said. 'Simex (Singapore International Monetary Exchange) will be around for a while.' 'I believe over the next several years there will be an emergence of two or three groups of futures and options exchanges competing with each other based on [a] global network,' he said. 'The membership of these allied exchanges and their customers will be able to trade risk-transfer products offered by the alliance.' Referring to the suggestion of former stock exchange chairman Edgar Cheng Wai-kin to merge the stock and futures exchanges, Mr Gilmore said it would need to consider carefully whether this move would have real benefits to the local market. 'The stock exchange and futures exchange are doing different types of business, with different risk portfolios and different types of members,' he said. He refused to comment further on the issue, saying there was no proposal for such a merger under discussion at the moment. He said the migration of the Hang Seng Index futures from open outcry to electronic trading in May would force its Japan and Singapore counterparts to consider a similar move. Mr Gilmore said the exchange would consider extending trading hours or introducing 24-hour trading on interest-rate related products or foreign-exchange products in a bid to increase its competitiveness.