LONDON (CNNfn) - German exchange operator Deutsche Boerse insisted Friday it remained committed to a pan-European trading system after a published report that it planned to abandon the alliance and join forces with its faster-moving London rival.|
"Our strategic goal is to establish a European cash market platform together with all our partners," a spokesman told CNNfn Friday.
The spokesman wouldnít elaborate on comments attributed to Peter Coym, a Lehman Brothers member who sits on Deutsche Boerse's supervisory board told German daily Handelsblatt Friday that the London Stock Exchange's own restructuring made bilateral cooperation or a merger possible options.
The alliance, Coym told the newspaper, would presumably present a more united front against the onslaught from rival trading systems
Deutsche Boerse, now the third-ranked European exchange in terms of market capitalization, after London and Paris, is in the midst of a restructuring that would aims to put up to a third of the exchange in the hands of a consortium of international investment banks.
Ultimately, Deutsche Boerse is hoping to become the trading platform of choice for Europe's largest blue chip stocks.
But it faces stiff competition from a host of upstart online brokerages and electronic communications networks, or ECNs. Others vying for the title of paramount pan-European trading system are Britain's Tradepoint Financial Services, Nasdaq Europe, and the Belgian-based Easdaq.
At the same time, it could spell a further setback for a fledgling eight-exchange alliance that was supposed to harmonize stock trading across Europe's largest platforms. The alliance, announced in September, includes London and Paris, and is expected to begin full-fledged operation in November 2000.
Some see the alliance as slow in bringing its ambitious goals to fruition. While several member exchanges now open at the same time, they are yet to fully harmonize buying and selling transactions or to link their technology seamlessly.
Deutsche Boerse stressed Friday that its planned restructuring, announced last week, does not signal an end to its commitment to a Europe-wide alliance.
A spokesman at the Paris Bourse said the eight-nation alliance remained on track, with greater harmonization to take place in 2000.
But Coym suggested in his comments to Handelsblatt that the Deutsche move reflects a harsher judgment about the viability of the pan-European grouping: "With the decision to change its structure, Deutsche Boerse AG is giving up the Europe-Alliance and embarking instead on all-out competition with other national European bourses."
Euroboard, the future name of the German bourse, was right to internationalize, Coym said, but had made its move a year too late. He added that the future of any alliance lay with London and suggested Euroboard could eventually base itself in the British capital.
"Deutsche Boerse chief Seifert understands this (a merger) to be one option," Handelsblatt reported Coym as saying.
An alliance between Deutsche Boerse and LSE failed last year over issues such as the creation of a common trading platform, but Coym was optimistic a second attempt could be successful.
"Competition with Tradepoint and other Electronic Communication Networks is in full swing. Pressure on bourses is thus much higher now than it was a year ago," Coym said.
Coym added a decision had to be made in London within the next 12 months before Frankfurt would take necessary provisions to go it alone.
Earlier this month Deutsche Boerse unveiled plans to revamp its ownership structure to allow more international firms to hold stakes. Among the options it was considering, the Boerse said, was privately placing shares, a capital increase and a listing. A final decision on the proposals will be taken at its annual shareholders' meeting next year.
Coym said the plans were a response to the mounting pressure on exchanges to provide a common European trading platform.
-- from staff and wire reports