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Are Stock Market Mergers & Trading Halts Called for "Technical Glitches" Actually Modern Warfare?
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On Feb. 10, 2011, London Stock Exchange Group agreed to buy the Canadian Stock Exchange (TMX Group Inc.) in Toronto. This action was done in advance of a future merger with the German firm Deutsche Boerse AG and NYSE Euronext.
Deutsche Boerse AG is the owner of the Eurex futures platform and Frankfurt Stock Exchange and NYSE Euronext is the parent company of the New York Stock Exchange. When completed, the future merger will create the world's largest exchanges operator worth about $24bn.
The combination of four total exchanges would dominate exchange trading in continental Europe and global derivatives trading.
Xavier Rolet, chief executive of the LSE, stated that he had secured the backing of the LSE's biggest investors from Dubai and Qatar.
Upon news of the LSE/TMX merger, shares of stock exchanges around the world soared. Shares in the Chicago Board Options Exchange soared 12pc while Nasdaq and Spain's BMX also rose.
[link to www.telegraph.co.uk]
On Feb. 15, 2011, Deutsche Boerse AG bought the New York Stock Exchange parent company NYSE Euronext. Deutsche Boerse AG will control 60 percent of the new corporation.
[link to www.theledger.com]
Also on Feb. 15, 2011, one day after completing a major system upgrade to the Millenium Exchange platform, the London Stock Exchange failed to stop trading as scheduled causing confusion among its clients.
The LSE ends normal trading at 1630 GMT before starting its closing auction, but had to concede on its website that normal trading did not cease until 42 seconds after the official close at 1630. The "glitch" was blamed on a technical problem.
London Stock exchange clients were worried the slight delay might have meant that orders destined for the auction were mixed with normal trades, triggering concerns over which trades had been executed.
[link to www.newsdaily.com]
On Feb. 22, 2011, Borsa Italiana (the Italian Stock Exchange) was forced to suspend all its markets for six hours due to a technical fault.
Traders in Italy, who were clamouring to process orders placed amid fears of the political fall-out in Libya, were left unable to trade on the exchange for most of the day.
Consob, the Italian financial regulator, has demanded an explanation from the London Stock Exchange because it which owns the Borsa Italiana. The London Stock Exchange is facing an official probe concerning the suspension of trades on the Borsa Italiana.
Borsa Italiana said the problem had occurred with DDMPlus, its technology provider of real-time price information, which failed before the markets were due to open.
[link to www.telegraph.co.uk]
Also on Feb. 22, 2011, the proposal by the Singapore Stock Exchange to take over the Australian Stock Exchange with the understanding that merger of the two with the Hong Kong Stock Exchange would occur in the future appeared to be in the final stages of negotiation (receiving Australian government approval).
[link to www.smh.com.au]
On Feb. 25, 2011, share trading on the London Stock Exchange was halted just after the open at 8 a.m. for four hours, infuriating traders, with the operator blaming it on a technical problem with SETS (Stock Exchange Electronic Trading Service) or SETS QX (Quotes and Crosses), the LSE platforms on which traders place their orders.
The latest incident came just two weeks after the LSE suffered a technical problem following the migration of a new trading system.
With this more recent technical glitch, equity traders were unable to react to data showing a surprisingly large drop in fourth quarter GDP, which prompted a fall in sterling and a rise in gilts, while there have been sharp moves in recent days caused by developments in North Africa.
At a time of uncertainty in the markets, where traders were having to keep on their toes with the situation in Libya, the last thing they needed was an unexpected halt to trading.
[link to www.foxbusiness.com]
On Feb. 28, 2011, share trading on the Australian Stock Exchange was halted Monday due to a technical glitch. The Australian Stock Exchange posted a notice on its website saying that that it was experiencing technical difficulties regarding trade dissemination on partition 3 securities and is "working toward re-opening the market today" although it added that it was unlikely the problem would be fixed before the market close. Trading was suspended in the afternoon, according to reports.
[link to www.marketwatch.com]
Continuing the rapid consolidation of the world's major stock markets, the London Stock Exchange Group just announced it is considering making a takeover bid for Nasdaq OMX Group later this year.
The possible offer for Nasdaq [NDAQ 28.02 -0.37 (-1.3%)] follows the London Exchanges announcement last month of plans to merge with Toronto's TMX Group.
[link to www.cnbc.com]
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So...are all of these mergers of the world's major Stock Exchanges and technical glitches that call a halt to trading related or unrelated?
What's my take on it?
It's a classic case of big fish eating the little fish UNTIL THERE IS ONLY A SINGLE HUMONGOUS-SIZED FISH LEFT.
Think about the ramifications of a SINGLE WORLDWIDE STOCK EXCHANGE.
You've heard about large corporations being more politically important to the governance of nations these days than elected governments?
Well, I think we're seeing financial business clout "invading" various large global regions just like huge armies did in the past.
I believe that what we are witnessing in the world's stock markets over the past 5 months or so (and it has greatly accelerated in February) is a NEW KIND OF WARFARE.
At this point, after all of these mergers, the number of major stock exchanges is down to perhaps only four.
After four there will be three and then two and then ONLY ONE.
That's my take on it anyway.
What do you think?
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