The Hong Kong Stock Exchange (HKEX) is reported to consider takeovers in the data, analytics, and blockchain fields.
HKEX to March Into Blockchain
According to people familiar with the matter, HKEX eyes takeovers in different technology fields, including blockchain, Bloomberg reports.
Insiders have purportedly said that the exchange has met with no less than three investment banks in order to discuss potential companies to target. The worsening relations between the US and China has HKEX’s CEO Charles Li concerned over lower trading volumes. Hence, the company is reportedly looking at the models of rivals NASDAQ Inc. and CME Group Inc.
Bloomberg’s report also outlines that 19 percent of NASDAQ’s 2017 revenue was from data products and 13 percent from market technology. In turn, HKEX’s revenue for the same year was almost entirely comprised from clearing and trading fees.
According to the sources, an internal HKEX strategy discussion held on September 10, including senior managers, was focused on technology acquisitions. Speaking on the matter, Banny Lam, head of research at CEB International Investment Corp, said in an email:
The strategy is in the right direction but it is not easy to achieve the targets. […] HKEX needs to maintain a momentum of growth by exploring new businesses.
Lurking Concerns
Bloomberg’s sources also outline that HKEX hasn’t been able to integrate its $2.2 billion investment, the London Metal Exchange from back in 2012. Purportedly, there are industry concerns whether or not the company might be able to pull off yet another major deal.
On another note, China’s march into blockchain technology seems to be gaining speed. While the country went on to institute a nationwide on cryptocurrencies, its stance on their underlying technology is entirely different.
Live Bitcoin News reported September 10 that People’s Bank of China assisted in the launch of Guangdong-Hong Kong-Macao Great Bay Area Trade Finance Blockchain Platform in Shenzhen in South China’s Guangdong Province.
Furthermore, the Supreme People’s Court of China also legalized the usage of blockchain for authenticating evidence.
What do you think of HKEX’s reported intentions to acquire blockchain companies? Let us know in the comments below!
Image courtesy of ShutterStock