JSE head sees "little doubt" for future tie-up

JOHANNESBURG Thu Mar 10, 2011 12:23pm EST

JOHANNESBURG (Reuters) - The Johannesburg Stock Exchange, Africa's biggest bourse, is likely to see a capital alliance or merger with a big overseas exchange eventually, although not in the immediate future, the head of the JSE Ltd (JSEJ.J) said on Thursday.

Russell Loubser, chief executive of the bourse operator, also told the Reuters Africa Investment Summit the number of new listings would remain "quiet" again this year.

A wave of consolidation has hit stock exchanges around the globe, as once-dominant bourses are being challenged by alternative trading platforms.

"I have very little doubt that that's going to come about at some stage," Loubser said when asked about a tie-up with a major overseas exchange during an interview at Reuters offices in Johannesburg.

"I'd be reluctant to get into any serious merger talks at this stage, because I think I'd be doing my shareholders disservice."

The JSE currently has an agreement where it shares technology with the London Stock Exchange (LSE.L).

Deutsche Bourse DG1Gn.DE last month unveiled a deal to acquire NYSE Euronext NYX.N and create an industry giant.

The London exchange has proposed a takeover of TMX Group (X.TO) which operates the Toronto Stock Exchange, while the Singapore Exchange (SGXL.SI) has bid $7.7 billion for Austalian bourse operator (ASX.AX).

The JSE's relatively small size makes it a less attractive target, Loubser said.

The Johannesburg bourse has a market value of $968 million, dwarfed by Deutsche Bourse's $15 billion and NYSE Euronext's $9.2 billion.

The JSE, which is due to release annual results next week, is likely to see few initial public offerings on either its main board, or its Africa board this year, Loubser said.

The exchange saw just 12 listings on its main board in the last year, and only one on its Africa board, which allows African companies outside of South Africa to list in Johannesburg.

This year will also be "quiet," he said.

"It's not happy days yet," he added.

(Additional reporting by Tiisetso Motsoeneng; Editing by Greg Mahlich)

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