Turkey's newly merged bourse searches for global partners

By bne IntelliNews May 9, 2013

bne -

Turkey is discussing a potential strategic partnership for the newly merged Borsa Istanbul with the London Stock Exchange and New York's Nasdaq, as Ankara mulls the next step in its bid to turn the country's economic capital into an international financial centre.

"We are holding talks with London and Nasdaq for strategic partnerships on Bourse Istanbul," Deputy Prime Minister Ali Babacan told reporters, according to Reuters. Once the Bourse settles on a strategic partner, which could involve it selling a stake in return for technology support, it would also seek opportunities for co-operation with other exchanges, such as cross-listings or joint indices, he added.

The opening bell was rung at Borsa Istanbul on April 5, following the merger of the Istanbul Stock Exchange, the Gold Exchange and Derivatives Exchange to create a single trading centre for the country. Turkey has stepped up its bid to build Istanbul into a global financial hub this year: in March and April, it kicked off construction of its planned huge new banking district, finalized the merger of its trading exchanges, and launched a drive to lure foreign listings to the new Borsa Istanbul.

Borsa Istanbul has also been busy talking with several potential partner exchanges, according to its chairman Ibrahim Turhan, who has previously also mentioned discussions with Deutsche Boerse. In late April, he told Hurriyet Daily News that the exchange is looking for strategic partners in three different categories. "The first of these [categories] will be selected from among the groups that will support our technological infrastructure and enhance our market access," he said. "The second will be among the market makers that could permanently provide liquidity, and the third will be among large and private investment funds that are acknowledged as opinion leaders in the global markets."

He added that up to 41% in Borsa Istanbul will be either handed to strategic partners or otherwise divested. And an unnamed source cited by Reuters said, "there is an IPO plan for around a 20-25% stake and the rest is planned to be sold in smaller stakes to other bourses, investment banks, a technology provider or hedge funds."

However, the source reckoned that instead of such a fragmented structure, "a bigger stake sale to a single strategic investor of this 41% would be more efficient."

Speaking alongside Babacan on May 7, Turhan said the talks with the German exchange are also continuing, while CME Group - owner of the Chicago Mercantile Exchange - is also involved. "Our aim is to finalise talks by July and progress to the level of signing a memorandum of understanding," he said.

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