Hong Kong's stock exchange is exploring opportunities to invest in other equities markets, using its reserves of $5.27 billion, to expand its international reach, according to sources.
A team of investment bankers will be appointed to look at 'investment or acquisition opportunities' with overseas exchanges or clearing houses, sources close to executives at Hong Kong Exchanges and Clearing say.
The move is an attempt to put HKEx's $5.27 billion shareholder fund to better use, the sources said. It is unlikely, however, that it will be seeking to buy other exchanges outright.
The decision was taken at an exchange board meeting last week. It was agreed that investment bankers should be appointed to conduct a study on whether to proceed with such a plan, and to identify potential targets for acquisition or investment.
The sources said exchange executives had recently been approached by investment bankers who suggested HKEx use part of its reserves to invest in other exchanges, electronic stock trading systems or clearing houses.
The HKEx fund comprises the reserves of the Hong Kong Stock Exchange, the Hong Kong Futures Exchange and the three clearing houses when they merged to form HKEx in March 2000.
For HKEx, it seems a simple decision. 'Acquisitions of overseas exchanges or trading platforms would not only bring a better profit for the exchange, but it would also help the exchange to build up co-operative relationships with international counterparts,' one source said.
