China group to buy Chicago Stock Exchange

[beijingwalker]

China group to buy Chicago Stock Exchange
by Matt Egan @mattmegan5February 5, 2016: 4:08 PM ET
One of America's oldest stock exchanges has just been sold to China.
The 134-year-old Chicago Stock Exchange reached a deal on Friday to be acquired by a Chinese-led group of investors.

The purchase by Chongqing Casin Enterprise Group is the latest U.S. investment made by China and would give the country a foothold in the vast American stock market.

The struggling Chicago Stock Exchange is a very small player in the exchange world whose presence is overshadowed by Nasdaq(NDAQ), the iconic New York Stock Exchange and newer entrants.

As of January, the Chicago Stock Exchange handled just 0.5% of U.S. trading, making it the third-smallest U.S. exchange, according to TABB Group.

Terms of the Chicago acquisition were not released. Privately-held Casin Group was founded in 1997 and has investments in real estate, environmental protection, finance and other areas. The Chicago Stock Exchange is minority-owned by a group that includes Bank of America (BAC),E*Trade (ETFC), Goldman Sachs (GS) and JPMorgan Chase (JPM).

It's not clear yet if the acquisition of the tiny Chicago Stock Exchange will face any political hurdles. Some prominent lawmakers opposed the attempted takeover of NYSE in 2011 by Deutsche Boerse,(DBOEF) a German company. That deal later collapsed and NYSE was acquired by Intercontinental Exchange (ICE) in 2012.

The Chicago Stock Exchange is "such a small player. It's certainly not as iconic as the New York Stock Exchange," said Joel Hasbrouck, a finance professor at New York University.

There is precedent for foreign ties to U.S. exchanges. For instance, in 2007 Nasdaq merged with OMX, a Nordic exchange, becoming Nasdaq OMX Group. It has since changed its name back to Nasdaq.

China group to buy Chicago Stock Exchange - Feb. 5, 2016

 

[TheRafael00000]

One day China will buy whole USA.

 

[oprih]

Great news, China is buying up america piece by piece.

 

[Aepsilons]

One day China will buy whole USA.

They have so much capital right now, the policy of external equity purchasing is not only prudent but also strategic . I expect sooner than naught , they will surpass Japan as the largest creditor nation on earth.....

It's a credit to East Asia, I suppose.

 

[cirr]

Now Chinese companies seeking US investors can opt to have their shares listed on the Chicago Exchange instead of the usual choices in NASDAQ and the NYSE。

 

[TaiShang]

They have so much capital right now, the policy of external equity purchasing is not only prudent but also strategic . I expect sooner than naught , they will surpass Japan as the largest creditor nation on earth.....

It's a credit to East Asia, I suppose.

Aside from profitability, China should concentrate on strategic sectors with long term planning -- at times, at the cost of short-term profitability.

In the 1970s-80s, Japan was involved in extensive M&A, but, I guess, perhaps due to heavy US government pressure, they abstained from strategic sectors. At the end of the day, the US benefitted from capital inflow from Japan while still keeping their strategic assets.

If US were unresponsive and protectionist, perhaps Japan could have looked at Europe. When access to the US market does not work, China often turns to Europe, as exemplified, for example, by the purchase of the Syngenta (Sp?).

 

[somebozo]

Thats one good way to dump surplus american dollar is by buying up american assets..

 

[Viet]

They have so much capital right now, the policy of external equity purchasing is not only prudent but also strategic . I expect sooner than naught , they will surpass Japan as the largest creditor nation on earth.....

It's a credit to East Asia, I suppose.

Chicago Stock Exchange is just a small player on the market. if chinese want to be BIG, they can try to buy Chicago Board of Trade, now a part of CME. or how about Japan? you can make an offer to buy CME.

 

[VCheng]

They have so much capital right now, the policy of external equity purchasing is not only prudent but also strategic . I expect sooner than naught , they will surpass Japan as the largest creditor nation on earth.....

It's a credit to East Asia, I suppose.

Remember the "Japan is buying up USA" scares of the seventies?

 

[Aepsilons]

Remember the "Japan is buying up USA" scares of the seventies?

Yes, i do remember reading about that (i did not exist yet till the mid 80s). China represents the greater version of that 'buyer scare' now. China, unlike Japan, will eclipse America. This is just a reality people must accept; it is hard at first, but ultimately they will come to accept it.

 

[VCheng]

Yes, i do remember reading about that (i did not exist yet till the mid 80s). China represents the greater version of that 'buyer scare' now. China, unlike Japan, will eclipse America. This is just a reality people must accept; it is hard at first, but ultimately they will come to accept it.

It ain't done until it is done. Nothing is inevitable here. The better economy wins, and the better system help achieve that. China's internal political and demographic demons have yet to wake up.

 

[Aepsilons]

It ain't done until it is done. Nothing is inevitable here. The better economy wins, and the better system help achieve that. China's internal political and demographic demons have yet to wake up.

I suppose the emphasis on demographic challenges is a constant variable the West is ... obsessed about. I suppose before the West, particularly the United States, and Western Europe , ridicule the Chinese , perhaps its best to focus on the some 11-30 million illegal immigrants in the United States; the latter's porous border with Mexico, the drug trade in said border. Not to mention also the civil rights abuses in the US. As for Europe, i believe they have a new issue to worry about --- their refugee crises, yes?

 

[VCheng]

I suppose the emphasis on demographic challenges is a constant variable the West is ... obsessed about. I suppose before the West, particularly the United States, and Western Europe , ridicule the Chinese , perhaps its best to focus on the some 11-30 million illegal immigrants in the United States; the latter's porous border with Mexico, the drug trade in said border. Not to mention also the civil rights abuses in the US. As for Europe, i believe they have a new issue to worry about --- their refugee crises, yes?

The immigrants keep the ratio of workers to retirees higher than it would be otherwise. China does not have this luxury, no ridicule needed. Their ratio of workers per retiree is about to fall dramatically, with all its consequences.

 

[Shotgunner51]

They have so much capital right now, the policy of external equity purchasing is not only prudent but also strategic . I expect sooner than naught , they will surpass Japan as the largest creditor nation on earth.....

It's a credit to East Asia, I suppose.

Bro China is already the largest creditor nation, i.e. Mainland, Hong Kong and Taiwan combined. But you were correct in saying China Mainland is still behind Japan which has been world's top creditor nation (if HK and Taiwan are accounted for as separate economies), will remain so for some time according to current trajectory.

On topic, it's a good to acquire CHX. China needs to reform/improve its own significantly underdeveloped financial markets, operational experience/talents gained in overseas assets like CHX could become useful. Mainland financial firms will continue to increase ODI.

China's financial firms speed up ODI | Asia First​

 

[Abacin]

Aside from profitability, China should concentrate on strategic sectors with long term planning -- at times, at the cost of short-term profitability.

In the 1970s-80s, Japan was involved in extensive M&A, but, I guess, perhaps due to heavy US government pressure, they abstained from strategic sectors. At the end of the day, the US benefitted from capital inflow from Japan while still keeping their strategic assets.

If US were unresponsive and protectionist, perhaps Japan could have looked at Europe. When access to the US market does not work, China often turns to Europe, as exemplified, for example, by the purchase of the Syngenta (Sp?).

Most of these deals should get approved by National Development and Reform Commission (发改委). This is different from Japan. I think that China wants to improve the domestic stock exchange through this deal. Try to get first hand experience how USA runs stock exchanges. China is well behind USA in the financial area.

Chicago Stock Exchange is just a small player on the market. if chinese want to be BIG, they can try to buy Chicago Board of Trade, now a part of CME. or how about Japan? you can make an offer to buy CME.

CME is a critical asset for US finance. It plays a big role in commodities. There is not a single chance for US to allow China to have strategic investment, let alone a buy-out.