SE Asian bourses years away from M&As -Thai regulator

Wed, Feb 23 2011
* Electronic trading link only likely option now - regulator
* Says bourse consolidation needs straightening legal system
* Mounting competition to fuel improvement in bourses

By Rachel Armstrong

SINGAPORE, Feb 23 (Reuters) - Most of South East Asia's stock exchanges are several years away from getting involved in the global wave of bourse consolidation, the head of Thailand's market regulator said.

Exchanges in Malaysia, the Philippines, Singapore, Vietnam, Indonesia and Thailand are setting up electronic trading links between their markets with the eventual aim of having cross-border dealing in all their listed shares.

But the ownership structures of these bourses -- with the exception of Singapore -- means that going any further than this and looking at full-blown M&A deals is currently not an option.

"Right now the only linkage is through the electronic means of this project, and that is the only likely option for now," Thirachai Phuvanatnaranubala, Secretary General of Thailand's Securities and Exchange Commission, told Reuters in a phone interview on Wednesday.

Deutsche Boerse bid for NYSE Euronext and Singapore Exchange's move for Australia's ASX have prompted talk that the major global exchanges market could soon be cut to just two or three big players.

This would leave question marks over the future of smaller exchanges such as those in Southeast Asia.

"How the exchanges in Asia and ASEAN can take advantage of this trend or not is quite difficult to say at this stage," said Phuvanatnaranubala.

Several exchanges in Southeast Asia are still largely controlled by governments and members so would probably need to demutualise before any deals could happen.

"I think the development is still in early stages in Asia and the ASEAN exchanges especially are still at the stage whereby we need to straighten out our legal system," said Phuvanatnaranubala.

"But obviously after that stage is over in the next few years then the people involved will have to think hard as to their future strategy," he said.

However, mounting competitive pressure would encourage the region's exchanges to improve their efficiency, he said.

"My feeling is that the more we let them compete the more we get rid of the hindrances and the faster they have to adapt and become leaner."

(Editing by Vinu Pilakkott)

((rachel.armstrong@thomsonreuters.com)(+65 68703835)(Reuters Messaging: rachel.armstrong.thomsonreuters.com@reuters.net)) Keywords: EXCHANGES THAI/

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