Vietnam is working on a plan to merge its two stock exchanges in a sign that some countries are starting to believe that having a single bourse is needed to ensure the survival of their capital market infrastructure as mega-exchanges span the globe.


Tran Duc Sinh, Chief Executive of the Ho Chi Minh Stock Exchange, set up only a decade ago, said the country’s ministry of finance was “preparing a plan” to merge his exchange with a much smaller one in Hanoi.
“Our market is on a small scale, we need to enhance our competitiveness and our Asean [Association of Southeast Asian Nations] neighbours have one exchange, so we should have the same,” he told the Financial Times at the World Federation of Exchanges meeting in South Africa this month.
Analysts cautioned that a merger of the two exchanges was unlikely to happen soon given the political and financial complexity of a combination.
The decision by the Vietnamese government to act comes as similar moves are under way in Russia, Turkey and in Japan.
Merger talks are ongoing between Japan’s two largest bourses – the Tokyo Stock Exchange and Osaka Securities Exchange – but these have hit complications over how to the value the TSE.
Japan has 11 exchanges, but analysts say it is under pressure to consolidate as Chinese exchanges in Hong Kong, Shanghai, Shenzhen and Dalian are growing rapidly.
The moves are a sign that some countries believe that consolidating their bourses into one group organised around the concept of a “national champion” will boost the competitiveness of their capital markets.
Deutsche Börse and NYSE Euronext, both in the top five exchanges by market capitalisation as listed entities, will this week make their case for a planned merger at a hearing with Brussels antitrust authorities. If the deal goes ahead, it would create the world’s largest bourse.
In Russia, the two main exchanges – Micex and RTS – are being merged after the ministry of finance in February gave the go-ahead after months of talks.
Eddie Astanin, chief executive of the Russian central securities depository (CSD), which will serve both exchanges once the merger is completed by year-end, said: “It was a political decision [to merge].”
“Our ambition is to be a regional CSD and the same for the exchange,” he told the recent Sibos settlement and payments conference in Canada.
In Turkey there are signs of a desire to consolidate exchanges and, like Russia, to use the new entity as a platform to satisfy regional ambitions. The two main exchanges, the Istanbul Stock Exchange and TurkDex, a derivatives exchange based in Izmir, have been locked in a dispute over which of them gets to offer trading in equity derivatives.
However Huseyin Erkan, chief executive of the Istanbul Stock Exchange, said it made no sense for both to compete against each other in futures and options trading.
“The regulator is interested in consolidating the exchanges. They know now that it’s not sustainable to have this many exchanges in Turkey,” he told the FT at the WFE meeting.