The stock exchange(s) is a cornerstone of the American capitalist system. Without our stock exchanges, many companies would not have raised the capital necessary to open for business. Of course, these days, crowdfunding (and other methods) are helping startups get off the ground, all without the need for buying, selling, and trading shares in publicly-owned groups.
Perhaps this new perspective, then, may be one of the driving forces leading to Chicago Stock Exchange Inc being purchased by a Chinese investment group. Yes, China’s Chongqing Casin Enterprise Group will soon own one of the oldest stock exchanges in America. Founded in 1882, the Chicago Stock Exchange now trades roughly 8,300 stocks and funds.
According to Chicago Stock Exchange President and CEO, John Kerin: “After an in-depth review of strategic alternatives for the exchange, we believe that this acquisition is the best outcome for our clients, shareholders and the trading community as a whole.”
Similarly, Chongqing Casin Founder and Chairman Shengju Lu commented, “We are honored to partner with CHX. Together, we have a unique opportunity to help develop financial markets in China over the longer term and to bring exciting Chinese growth companies to U.S. investors.”
CSE’s Kerin goes on to comment that the new partnership will increase purchasing resources and introduce new business initiatives. He also adds that the move will encourage a better outlook by improving trading efficiency as well as the value proposition of the stock exchange to clients and the overall trading community as a whole. More importantly, though, he comments that the additional resources will help to launch, the CHX Snap product this coming Spring.
But this may not only help on the American side. China’s export market has fallen for the past seven months straight; and that is just one indicator of a slowing economy. . As a matter of fact, bank lending remains among the top economic factors in China. Thus, China’s investment sector appears to be putting more money into projects that can continue to support the country until the overall economy improves there as well.
The price of this acquisition has not been released and the deal awaits approval by the US Securities and Exchange Commission.