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Hong Kong stock exchange could find London exchange 'unaffordable,' says strategist

Hong Kong stock exchange could find London exchange 'unaffordable,' says strategist

12.9.2019

Hong Kong stock exchange could find London exchange 'unaffordable,' says strategist

The Hong Kong stock exchange could find the London stock exchange 'potentially unaffordable,' according to a chief strategist at Bank of Communications International.

London Stock Exchange Group (LSE) to "combine the two companies" in a deal which values the LSE at about £29.6 billion ($36.6 billion). But the size of the deal also makes it "more expensive and potentially unaffordable" for the HKEX, Bank of Communications (BOCOM) International's Hao Hong told CNBC's "Squawk Box" on Thursday. "It's not the cheapest deal," he said. "I think it could put this merger, if (it) goes through, to be ... one of the more expensive exchanges in the world." "One would expect that the price tag could go up as negotiation progresses," Hong told CNBC by email, in response to a follow-up question. "The Hkex doesn't have any debt. It's unclear how willing the shareholders would be to assume more leverage to consummate the deal." HKEX did not immediately respond to a CNBC request for comment. HKEX proposed £20.45 a share in cash, as well as 2.495 newly issued HKEX shares. It said the deal would be funded by a combination of existing cash and a new credit facility. It cautioned, however, that its statement to the market should be considered an announcement to make a possible offer, rather than as confirmation of a firm intention to bid. Additionally, Hong said that the HKEX would have to meet "many conditions." "It's a challenge for Charles, obviously," Hong said, referring to HKEX CEO Charles Li. Complication from LSE's Refinitiv deal One of the biggest challenges HKEX would face is from LSE's recent $27 billion deal to acquire financial data services firm Refinitiv , said Hong. The HKEX deal "was announced soon after the Refinitiv deal, so you know, there's quite a bit of legal complication and also political overlays on top of the deal in terms of the timing, because of the situation here in Hong Kong as well," Hong added, in reference to months of protests in the city . For its part, the HKEX has said the proposed deal would only go ahead if LSE backs down from its plan to buy Refinitiv, while the London Stock Exchange said it was committed to and continued to make progress on the planned acquisition of the data firm. Strengths at HKEX and LSE If a deal was reached, however, there are potential benefits, Hong said. It would allow for 18 continuous hours of trading, he said. Furthermore, he argued, each exchange brings its own strengths to the table. "The London exchange is very strong at (fixed income, currencies and commodities) while ... Hong Kong is one of the biggest IPO markets in the world," Hong said. — CNBC's David Reid contributed to this report. Related Tags Read more: CNBC

Hong Kong Stock Exchange Makes $36.56 Billion Bid for London Stock ExchangeThe Hong Kong Stock Exchange said it has approached the London Stock Exchange with a $36.56 billion cash and share offer and plans to seek a recommendation from its board. London on sale? What does that even mean? And how is that possible

Hong Kong stock exchange makes $36.6 billion bid for London stock exchange Hong Kong Exchanges and Clearing Limited said on Wednesday it has made a proposal to the board of London Stock Exchange Group. I dont think that's a very good idea. Hong Kong is still communist China. Is this a bid to further itself into western economies? Here comes the Chinese! JoeSquawk andrewrsorkin BeckyQuick China is taking over the world

Hong Kong Stock Exchange Offers to Buy Its London CounterpartThe offer, which values the British company at nearly $37 billion, would create a global markets operator with significant access to China. Well... they'll probably deal with the Islamic takeover better than you, they've been fighting China for how long? CEO of HK Exchange Charles Li has deep relationship with CCP. What is the true reason behind this buy offer? Hope UK really think about it. there many stock in HKEX is poisoned in recently year,the account firm should held accountable but failed.Largely due to china gov want those stock go listed no matter what. How many hidden bomb in HKEX?I bet enough to strat a firework show.

Hong Kong Exchanges proposes $39 billion London Stock Exchange takeoverThe Hong Kong Exchanges and Clearing Limited has proposed a 31.6 billion pound (... save_israa With China trying to swallow up Hong Kong entirely, this should work out just fine. Between the EU and China, Great Britain will soon only exist in folklore. who would want soon to be worthless HK$?

Hong Kong Stock Exchange Bids Nearly $37 Billion for London RivalA deal would unite two of the world’s major stock exchanges when both regions are under political pressure, with Hong Kong reeling from a summer of violent protests and London gripped by political paralysis. Wow. Deal might allow CHINA to manipulate markets to negatively impact future US economy. Corporate CHINA is much differently structured than Corporate America and Western Europe. Sen. Rubio has a heads up on this one.

Hong Kong makes $37 billion bid for the London Stock Exchange Hong Kong has made a surprise £30 billion ($37 billion) takeover bid for the London Stock Exchange. It would create the world's third biggest stock exchange group behind the New York Stock Exchange and Nasdaq in terms of the value of companies listed. True, Sir. It's not HongKong. It's Shanghai, Beijing, China or CCP whatever you name it. Bring it on! 5b)When even children cry&make a stand,anyone will know something is deeply wrong with the State.HongKongProtests



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