The chief executives leading the worldâ€™s two largest stock markets - the New York Stock Exchange and Tokyo Stock Exchange - shook hands high above the NYSE trading floor before the opening bell on Wednesday, after announcing that the groups will create an alliance that sets the stage for a possible merger or acquisition.
NYSE Group Inc. CEO John Thain and Tokyo Stock Exchange President and CEO Taizo Nishimuro signed a letter of intent this morning to establish a non-exclusive alliance that will explore possibilities in developing new opportunities in trading systems and technology, investor and issuer services, investment products, governance and regulation. They will also explore ways to let investors get easier access to stocks available in both markets.
â€œWe are committed to the success of this strategic alliance, which will benefit and create growth opportunities for both markets and our respective customers, advance our global vision, and further strengthen the ties between Japan and the United States ,â€ said NYSE Group CEO John Thain in a prepared statement.
Nishimuro added that the alliance â€œwill be a good starting point for a much stronger tie-up with the NYSE.â€
The linkup comes as global markets are looking to create alliances and make acquisitions to take advantage of the global influx of new companies seeking to be publicly traded. The New York Stock Exchange is in the final stages of merging with Europeâ€™s second largest stock market, Euronext NV.
Under the terms of the agreement announced today, NYSE Group and TSE representatives will meet regularly to dialogue and develop information and market infrastructure systems and technology, trading services, market data products, issuer and investor services, cross-marketing and promotional activities, and listed company regulation and governance, the companies said in a statement.
The agreement also allows for an exchange of personnel if necessary, to explore global strategic trends affecting each companyâ€™s businesses.
Among the 19 Japanese companies currently listed on the NYSE are Canon, Honda, Sony and Toyota.
The market capitalization of companies listed on the NYSE is $26.5 trillion, while the capitalization of TSE companies is 549.7 trillion yen ($4.53 trillion).
Shares of NYSE Group were down 2 cents to $100.73 in early morning trading on the New York Stock Exchange.