There are many and different aspects to reflect on highlighted by theTakeover bid on the London Stock Exchange by the Hong Kong Stock Exchange, I recall a few. First, it's a $39 billion offering on the London Stock Exchange, partly for cash and partly for paper. The size of the offering suggests how much liquidity is roaming the world in search of profitable investments including stock trading platforms. Secondly, the offer has been rejected for the time being as considered "not feasible", suggesting that the English government could exercise special powers according to the national interest solicited by Brexit supporters; a sovereign and non-market response. But it should also be remembered chand in 2007 the London Stock Exchange acquired Borsa Italiana Spa not so much for the modest number of listed companies (never more than 300 units) on the MTA (electronic stock market), but above all for the MTS (government bond market) on whose technological platform large quantities are traded, with high profits wholesale unit rates of listed and unlisted government bonds. A technological platform that could prove to be strategic for the Italian economy and on which, in the event of transfer to the Chinese, the MEF could exercise the special powers envisaged by law no. 30 of 1994 May 474 (TUF art 104 bis, paragraph 7), in compliance with Italian law. Again a potential non-market response.
Even more recently the London Stock Exchange completed the acquisition of Refinitiv, a colossal data provider, which operates in the field of big data, in order to create an important infrastructure for the financial markets. Also in this case we point out the importance of integrating technological platforms for the management of risk and debt capital markets.
It is true that for years the appetite of the most diverse stock exchanges has turned to the LSE (London Stock Exchange) and to the study of how to acquire it within their operational boundaries because LSE lists over 2600 companies from around 60 countries, constituting the most important segment of the entire English financial system. But purchase or exchange offers from other Stock Exchanges have always been rejected by the board of the London Stock Exchange. For example, in the year 2000 the London Stock Exchange rejected the purchase and exchange offer by the Swedish group Om, which controlled and operated the Stockholm Stock Exchange. The bid was deemed "inappropriate", as if successful, LSE shareholders would have held 18,5% of Om. Nasdaq USA also tried in vain in 2006, with a cash offer of £ 2,7 billion or 1.243 per share addressing shareholders directly. The Nasdaq then approached the shareholders directly after the LSE board rejected this offer, but the shareholders did not respond to the offer. Later in 2016, Deutsche Borsa also tried equally unsuccessfully with a 25 billion euro merger proposal with the London Stock Exchange Group, wanting to demonstrate the opportunity for integrating technological platforms.
In the face of such past and present events, it seems appropriate to ask whether the shopping of European stock exchanges by non-European financial giants equipped with ever more powerful technological platforms for trading securities is just around the corner.
In this regardo worries that the EU Stock Exchanges are still dispersed throughout the European territory with very modest listing sizes both by number of listed companies and by stock market capitalisation. According to the annual report of the FESE (Federation of European Securities Exchanges) in the year 2018, there were 35 markets trading shares, bonds and derivatives distributed in 30 countries with 19 full members, 1 affiliate and one observer. Markets on which 8456 companies were listed, of which just 12% were foreign. In comparison with the LSE which brings together over 2600 listed companies, the marginality and weakness of the individual securities capital markets is evident, still dispersed across the most diverse technological platforms. Among these figure Euronext with approximately 860-870 listed companies, while the Frankfurt stock exchange does not reach the number of five hundred listed companies. It is a small garden of stock exchanges which could appeal to many, but whose "sovereign" defense could be ineffective by the special powers of individual states.
A first consideration that can be drawn from the events described and from the realities summarized in a few data and which appears appropriate before the shopping of the small European stock exchanges by some other non-EU stock exchanges begins, even in an anti-euro key, is to ask the new European Commission both to complete the project of building the single European capital market, and to proceed in favor of the aggregation on a single technological platform of the negotiations conducted by the 36 European Stock Exchanges. Would be the first step to start building the ESE-European Stock Exchange, with eight thousand and six hundred listed companies, would constitute a technological platform for the capital market capable of competing with the most important financial centers in the world. The sovereignty of the European states with their special powers would not act as a shield for the shopping of the stock exchanges, unless we maintain an asphyxiated capital market that would impede the European technological and economic development.
