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OMX

Nasdaq buys OMX

Nasdaq Stock Market Inc announced on Friday that it has acquired Swedish exchange operator OMX AB in a deal worth $3.7 billion.

The U.S. electronic exchange, home to such technology bellwethers as Microsoft Corp and Dell Inc., is expected to use the acquisition as a springboard to gain European listings.

Trading in shares of Nasdaq was halted for “news pending” right before the exchange closed in New York on Thursday. Trading in OMX, Europe’s fifth-largest stock exchange, was halted in midday trading pending an announcement.

OMX Chairman Urban Bäckström spoke at Friday’s press conference of a “historic day” that signalled the beginning of a “wonderful marriage”.

Shares in OMX rose 3.2 percent before the suspension. Nasdaq shares gained 79 cents, or 2.4 percent, to $33.98.

“The future of exchanges is about technology, flexibility and scale. NASDAQ and OMX together deliver all of these benefits,” said Robert Greifeld, CEO of Nasdaq in a statement.

The deal between the two exchanges comes a month after the New York Stock Exchange completed its $14 billion acquisition of Euronext, which operates the Paris, Amsterdam, Brussels, and Lisbon stock exchanges. NYSE Euronext formed not only the first trans-Atlantic financial market, but the world’s largest, and set off a global rush for exchanges to partner or be left out of a massive consolidation push.

It also represents a major breakthrough for the Nasdaq, which failed in a hostile takeover bid to acquire London Stock Exchange PLC, Europe’s second-largest equities market. Nasdaq might use the acquisition of OMX to persuade LSE shareholders to agree to a deal creating a giant European exchange.

Nasdaq already owns almost 30 percent of the London exchange.

Nasdaq Chief Executive Robert Greifeld said during an investor conference Monday that he would consider a major acquisition that fit strategically, which has been the exchange’s mandate when looking at targets. Though he prefers organic growth, Greifeld has not denied that takeovers will help the exchange grow – especially in Asia and Europe.

“We’re fortunate to be in a space where consolidation can work,” he said at a Fox-Pitt Kelton conference on the state of global exchanges. “We expect to participate in that so we can hit multiple cylinders.”

OMX shares soared in mid-April after a news report said the exchange had received a 23 billion kronor ($3.36 billion) offer from Nasdaq, but both exchanges denied an offer had been made. At the same time, OMX said it was in “exploratory discussions with several exchanges and other market venues regarding possible forms of cooperation” but did not issue any further details.

Both the London Stock Exchange and Deutsche Boerse were also rumored to be interested in the Nordic exchange.

AP/AFX/The Local

STOCKS

Stockholm stock market hits new all-time high

The Stockholm stock exchange closed at a record high on Wednesday, with the OMXS index climbing 1.4 percent to smash the previous record set in 2007.

Stockholm stock market hits new all-time high

The OMXS closed at 430.6, besting by more than three points the previous record of 427.2 set in July 2007.

"Finally, after more than five years, we've come up to the all-time high," Nordea stock strategist Martin Guri told the TT news agency.

The Stockholm stock market's advanced was in line with developments on other exchanges around the world, and can be attributed to a new World Bank forecast indicting advances in global economic growth. Strong retail sales statistics from the United States helped as well.

Guri rejected any notion that the Stockholm exchange's recent rise was any sort of bubble, but is simply a continuation of a strong 2013.

"We had the worst financial and economic crisis since the 1930s. Now we can say that we've left it behind and are moving on to the next chapter," he said.

"The market could rise somewhere between ten and 20 percent this year."

He added that there are many signs of economic improvements, and while economic growth may not be strong, risks have deteriorated, bolstering investor confidence. 

Guri cited central banks in the US, Japan, and the eurozone for stimulating stock market growth.

"They've promised financial markets they plan to keep interest rates low," he said.

Wednesday's OMXS rise was led by heavyweights such as retailer H&M and bank Nordea, which climbed 2.7 percent and three percent, respectively, as the Swedish fashion retailer reported better than expected sales results for December.

Other market winners on Wednesday included pharmaceutical firm AstraZeneca, telecom equipment maker Ericsson, and truck maker Scania, all of which rose by around two percent.

The Swedish krona weakened slightly against the dollar, which can now buy 6.48 kronor. The krona-euro exchange rate remain unchanged, at 8.80 kronor to the euro.

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