Jasdaq in talks with Bombay Stock Exchange for tie-up

Jasdaq Securities Exchange Inc, Japan's biggest market for startups, is in talks about an alliance with the country's Bombay Stock Exchange amid plunging trading volumes.

Jasdaq aims to lure Indian companies to sell Japanese Depositary Receipts on its Neo Market for technology stocks, said Takashi Tsutsui, chief executive officer of the Tokyo-based bourse, in an interview in Tokyo. Tsutsui said he hopes to reach a formal agreement as early as next month.

"We see opportunities to use our experience in the global market and we can do that by allying with exchanges around the world,'' Tsutsui, 57, said in an interview yesterday. "We've basically reached a memorandum of understanding."

An agreement with Asia's oldest bourse may help Jasdaq compete for listings with Tokyo Stock Exchange Inc, which handles 90 per cent of trading in Japan and has struck alliances with the New York Stock Exchange and the London Stock Exchange this year. Daily trading on Jasdaq slumped 54 per cent from a year earlier in the six months ended September 30, and it forecasts a full-year loss.

Securities exchanges globally are making acquisitions and forging alliances to expand and give investors the option to trade multiple financial products round-the-clock as bourses compete to attract capital. Almost $50 billion of proposed mergers by exchanges were announced in the past two years, according to data compiled by Bloomberg.

The total market value of stocks traded in India has doubled this year to $1.7 trillion, ranking it fifth in Asia, after Japan, China, Hong Kong and Australia, Bloomberg data shows.

The agreement may extend to Bombay Stock Exchange and Jasdaq taking stakes in each other, Tsutsui said, declining to give further details. Kalyan Bose, spokesman at the BSE declined to comment.