The jockeying for position among global stock markets continued with the news that the Singapore Exchange Ltd. is taking a 5% stake in the Bombay Stock Exchange Ltd.

The SGX and BSE announced that they have entered into an agreement for SGX to invest in a 5% stake in BSE for about US$42.7 million. The two exchanges have also agreed to actively explore collaboration in various areas relating to listings and product development, leveraging on the SGX’s position as a regional hub for derivatives and international listings and the BSE’s strong presence in India.

The issue of new shares is subject to relevant regulatory and shareholder approvals.

“This strategic tie-up with SGX will offer the Asian advantage to BSE. SGX is Asia-Pacific’s first demutualized and integrated securities and derivatives exchange. They bring a huge amount of learning to this partnership,” said Rajnikant Patel, managing director and CEO of BSE. “This partnership will not only be mutually beneficial to both the exchanges, but also complement our association with Deutsche Börse. This alliance will position BSE to be an important player in the increasingly globalised marketplace.”

Added Hsieh Fu Hua, CEO of SGX: “We look forward to supporting BSE’s goal to strengthen their international position. Together, we aim to identify new business development opportunities and to foster an enduring partnership that is beneficial to both exchanges and our customers. Our investment in BSE is consistent with our strategy of building an Asian Gateway for securities and derivatives products.”

Kotak Investment Banking advised BSE and UBS Investment Bank acted as financial advisor to SGX in connection with the transaction.