11 September 2019 – The Hong Kong Stock Exchange is making moves to take over the London Stock Exchange Group with a surprising bid of £32bn.
The bid would be by far the largest transaction in HXEX’s history. Charles Lei, Chief Executive of HXEX stated that “Bringing HKEX and the London Stock Exchange together will redefine global capital markets for decades to come. Both businesses have great brands, financial strength and proven growth track records.” This could be a lifechanging bid for Hong Market, knowing that LSE’s market cap is worth trillions.
HKEX has drafted a proposal to LSE that stipulates that the offer only stands if their previous deal with Refinitiv is either voted down by shareholders or dismissed.
HXEX’s largest shareholder is the Hong Kong government, who stated their intentions are to “reinforce Hong Kong’s position as the key connection between China, Asia and the rest of the world.
The bid demonstrates that Hong Kong is still confident in the UK market, despite negotiations over Brexit as Britain prepares to exit the European Union. Brexit has provided the perfect opportunity for overseas investors, who at the moment, are able to get much better deals on transactions because of the value of the pound.
Outside of London, you’ll see that this confidence is very much prevalent in Manchester too, where the property market continues to thrive from overseas investment. In July, we wrote about why a weak pound is a huge opportunity for investors, this couldn’t be more true given the news today.
In comparison to the USD, Sterling has weakened by approximately 15%, making property 15% cheaper for investors with funds in a foreign currency.
Investors are seizing opportunities to acquire assets that deliver huge returns, at a significantly reduced price because of sterling devaluation. This currency window of opportunity won’t last forever, once Britain leaves the EU, either with a deal or without one, the British Pound is predicted to regain its losses.
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