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Business deals

Japan Exchange Group to sell stake in Singapore bourse

The operator of Tokyo Stock Exchange will end 11-year capital tie-up

TOKYO -- Japan Exchange Group, the operator of the Tokyo Stock Exchange, will sell its entire 4.95% stake in Singapore Exchange, in response to a corporate governance code discouraging businesses from holding shares for strategic rather than investment purposes.

The company said Friday it will sell its holdings, now worth about 32 billion yen ($301 million), over a roughly three-year period.

Tokyo Stock Exchange Inc. acquired the stake in 2007 for 37.4 billion yen. The shares later suffered a large drop in value, forcing the Japanese company to book a 20.7 billion yen write-off in 2009. The stock eventually rebounded. Tokyo Stock Exchange merged with Osaka Securities Exchange in 2013 to form Japan Exchange Group.

The purchase was part of an overseas expansion push by then-TSE President Taizo Nishimuro, aimed at promoting cross-border consolidation of exchanges.

Realignment involving securities markets in various countries is often made difficult by differing legal and regulatory frameworks, and Japan Exchange Group's case was no exception. Efforts to find other ways to collaborate, such as listing products on each other's bourses, also fared poorly.

"We must build cooperative relationships with not just Singapore [Exchange], but also [other] global exchanges," Japan Exchange Group CEO Akira Kiyota told reporters Friday.

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