The pentagon is a beautiful and mysterious geometric figure. As early as the 6th century BC, the Pythagoreans of ancient Greece discovered that the intersection points of the lines in a regular pentagon will divide each other into two parts with a ratio of 0.618, which is the best-known natural aesthetic code - gold. Split rate.
From a philosophical perspective, this ingenious pentagonal plane shape indicates the complex relationship between multi-polar forces and the mutual checks and balances.
For a long time, the New York Stock Exchange (NYSE) and Nasdaq Stock Exchange (Nasdaq) in the United States, together with the London Stock Exchange (LSE) and Euronext in Europe Together with the Deutsche B?rse (DB) ***, it has built a pentagonal pattern in the international securities market.
Under mutual cooperation and mutual restraint, the five major stock exchanges are chasing each other, providing a steady stream of financial assistance to the world economy. But times have changed, and the pentagonal pattern of the international securities market is quietly collapsing.
Nibble away and lose two out of five
Under the surging wave of financial mergers and acquisitions, one corner or even two corners of the pentagon are always facing the fate of disappearing. The most eye-catching one is naturally the "life and death disaster" of the London Stock Exchange.
Since 1998, Deutsche B?rse, Euronext, Nasdaq and the New York Stock Exchange have successively launched offers to acquire the London Stock Exchange, although the British's arrogance ultimately failed. These M&A news can be turned into reality, but no one doubts that the "century-old" London Stock Exchange is slowly moving towards the end of its glorious history.
The recent big move by Nasdaq to "build plank roads overtly and cross old warehouses secretly" is accelerating the disappearance of the London Stock Exchange. According to news from the Wall Street Journal (European Edition) on May 4, Nasdaq has raised its shareholding ratio in the London Stock Exchange from 15% to 19%, which means that it is difficult for anyone to stop Nasdaq. Dak's plan to fully acquire the London Stock Exchange is implemented.
After losing the lead in the "Battle for London", the New York Stock Exchange, Euronext and Deutsche Boerse were not idle either. The New York Stock Exchange and Deutsche B?rse are launching a new round of competition around the merger plan with Euronext. Market information in early May showed that the New York Stock Exchange, which had planned to move later, was likely to arrive first and take advantage of the stalled negotiations between Germany and Euronext to forge a "Qin-Jin relationship" with the latter.
Amidst the changes, the pentagonal structure of the international securities market is in danger, and the eye-popping large-scale cross-ocean mergers and acquisitions between several major exchanges herald the coming of a new financial era. Amidst the hustle and bustle, a thought-provoking question plagues the market: Why did such a change occur?
Strategy: Learn from each other’s strengths
With the rapid progress in basic science and technology and financial theory, innovation has gradually become a core keyword for the development of the financial industry in the new century.
In the context of a market in which financial products are becoming increasingly abundant and financial businesses are becoming more sophisticated, the international securities market has shown a diversified pattern in which a hundred flowers bloom and each shows its own merits. The five major stock exchanges, which have different development histories, geographical locations, different cultural backgrounds, varying technological content, and completely different management philosophies, have "comparative disadvantages" in different fields. This is destined to make mutual penetration the only choice for their respective survival and growth.
To be specific, the New York Stock Exchange, which has a long history of 214 years, as the largest, oldest and most prestigious stock exchange in the United States, has been shrouded in the "Grasso compensation scandal" for a long time. In the shadows, its persistence in the backward "sign language transaction" model has already made it the laughing stock of the industry in the era of electronic transactions.
Although the new president Sean is working hard to promote a hybrid model of coexistence of electronic trading and manual trading, in the current era of rapid technological innovation and application, this kind of compromise is obviously difficult to fully improve the efficiency of the New York Stock Exchange. .
In this regard, the 233-year-old London Stock Exchange is even more disappointing.
In the 2001 takeover battle for London's international financial futures and options trading, the aging British lady showed astonishing slowness and ignorance, a arrogant and arrogant attitude, a careless merger offer, and a plan full of loopholes. The negotiation plan brought to naught the "technological marriage" that instinctively activated the London Stock Exchange, directly leading to the miserable situation of the London Stock Exchange today where "man is a knife and I am a fish."
As for the upstarts in the industry, Nasdaq, Euronext and Deutsche B?rse, although these new generations have inherent advantages in saving transaction costs, their weak brands and insufficient foundation have always hindered their advancement. The bottleneck of the self. By merging with established exchanges, they can not only gain the integration advantages of broadened business scope, enhanced management experience, and extended trading hours, but can also directly achieve bottleneck breakthroughs in brand optimization.
In short, the existence of complementarity and the requirement of market diversification have caused the development trend of the five major stock exchanges to integrate with each other, which directly catalyzed the collapse of the pentagonal pattern.
Trend: Becoming Bigger and Stronger
If you zoom in to the entire international financial industry, it is not difficult to find that in the fields of securities and banking, large-scale mergers and acquisitions of "strong alliances" are already the Market mainstream.
In the international financial field with frequent capital flows, "economies of scale" have gradually evolved into a signature feature. The survival principle of the market is that "big does not necessarily mean strong, but strong must be big." Only strong capital, Only financial institutions with huge assets have stronger competitiveness and win opportunities in the increasingly fierce struggle for survival.
The choice of the five major stock exchanges to join forces with each other under this financial wave is an effective signal of credit enhancement. Through mergers and acquisitions, the giant and group-based new stock exchanges, as an important carrier of capital financing in the era of economies of scale, have avoided the embarrassment of being disconnected from the financial industry chain.
The imbalance of economic and financial integration
Continuing to enlarge the perspective, the cracks between the world economy and international financial development trends are quietly emerging.
In the context of the rapid development of international trade, deepening regional economic integration, and increasingly frequent global economic cooperation, the pulse of the world economy is becoming increasingly stable and harmonious, and globalization is formed by regional, cultural, and national differences. Barriers are falling rapidly.
However, compared with the rapid integration of the real economy, regional differences in the financial field are still an important obstacle restricting the substantial flow of international capital. The lack of transnational, transoceanic, and transcontinental "super financial supermarkets" has given rise to The further deepening of economic globalization has brought about bottleneck constraints.
The mergers and acquisitions between the five major stock exchanges are just the natural reaction of the market under the macro demand to make up for the cracks. The collapse of the pentagonal pattern and the emergence of new patterns are quietly integrating the international securities market. An invisible bridge has been established between economic globalization and financial integration.
In short, the collapse of the pentagonal structure of the international securities market is an inevitable trend in the development of international finance. While fully aware of the inevitability, the disappearance of the pentagonal perfect checks and balances mechanism is worrying. The international securities market is likely to encounter new regulatory issues and legal bottlenecks after the merger and acquisition is completed. However, before that, the rational choice is to wait and see the market changes and grasp the information of mergers and acquisitions.
(The author is a Ph.D. in International Finance, Fudan University)