NYSE Euronext Enters Middle East Market
Transatlantic stock exchange giant, NYSE Euronext, has surged ahead in its quest to gain ground as a truly global stock exchange by buying a 25 percent stake in the State of Qatar’s Doha securities market. A $250 million cash payment will seal the deal, giving NYSE Euronext a firm foothold in the fast-growing economy of the Middle East.
This strategic move has put NYSE Euronext ahead of the London Stock Exchange and the Deutsche Börse of Germany in the race for a share of the Middle East market. The growing trend of stock exchanges to merge or buy stakes in other stock exchanges is a response to demands from clients who want to rapidly trade shares anywhere in the world. Additionally, recent credit market disruptions and sluggish economic growth in some established markets have sparked increased interest in less-developed markets.
NYSE Euronext will assist Qatar with technology and management expertise to build the Doha exchange into an integrated cash and derivatives exchange meeting international standards. This investment of time, money and know-how is aimed at helping Qatar to compete with Dubai in becoming the world-class financial center of a region that is increasingly exploring alternative avenues of income to reduce their economic dependency on natural resources. Qatar will serve as a business center in the Middle East for NYSE Euronext, which will have 3 of the 11 seats on Doha’s board.
The State of Qatar has been investigating the possibility of a significant partnership in the international market for about two years. In January this year the search was intensified and, with Qatar owning a 15 percent share in the London Stock Exchange, it was considered to be the favorite. However, it was NYSE Euronext that presented the most attractive offer, which was accepted. Contrary to speculation by some analysts that this signaled the end of Qatar’s relationship with the London Stock Exchange, Qatar has emphasized that it has no intention of severing existing ties with the LSE and is open to the possibility of future collaboration.
A merger between the NYSE Group and Euronext, resulting in NYSE Euronext, in May 2006 has made the corporation a force to be reckoned with in the financial investment world. Major Euronext branches are located in Brussels, Paris, Amsterdam, Lisbon and London, with major NYSE branches located in Chicago, California and New York.
NYSE Euronext Chief Executive, Duncan L. Niederauer, has been quoted as saying that “It is a great privilege to align NYSE Euronext with Qatar and Doha’s financial marketplace, whose role is increasingly important in the Gulf region and globally.”