By Marcus Williams.
The exchanges of the emerging markets bloc of Brazil, Russia, India and China are forming an alliance to help deepen their liquidity and offer investors pooled exposure to their markets.
This initiative was announced at the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg yesterday.
The initiative brings together BOVESPA from Brazil, MICEX from Russia (currently merging with RTS Stock Exchange), Hong Kong Exchanges and Clearing Limited and Johannesburg Stock Exchange (JSE) from South Africa. The National Stock Exchange of India (NSE) and the BSE Ltd (India) have signed letters of support and will join the alliance after finalising outstanding requirements.
At the first stage of this project the exchanges will begin cross-listing of financial derivatives on their benchmark equity indices. It is planned to launch cross-listed products by June 2012.
At the second stage of the project members of the alliance plan to jointly develop new products for cross-listing on their exchanges. “In addition to measuring market performance, equity indices may be used as underlying assets to create new products, which can be the next step in the alliance development”, said Russell Loubser, CEO of the JSE.
The products designed at the second stage would then be cross listed and traded in local currencies.
The third stage may include further cooperation in joint products design and new services development.
Looks like Jim O’Neill’s marketing concept has got legs…
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