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Dubai: The Doha Securities Market (DSM) is in negotiations with the London Stock Exchange (LSE) to enter into a formal tie-up for the use of its technology platform and for potential marketing of it in the Middle East region, according to sources close to the negotiations.
An agreement between DSM and LSE is expected to enhance the competitive edge of the Qatar exchange on the face of growing competition from Borse Dubai, which has a tie up with international stock exchange operators such as the Nordic exchange OMX and the US exchange Nasdaq.
"We are having discussions with DSM about more co-operative work. It will be more than a memorandum of understanding limited to sharing information," the London-based Middle East Economic Digest quoted LSE spokeswoman. The deal could cover the use of the LSE's technology. The London market introduced a high-speed trading platform called Tradelect in June 2007, which can process transactions in 10 milliseconds, the magazine said.
Currently Qatar Investment Authority (QIA) owns 15 per cent of LSE. Qatar, which owned about 10 per cent of OMX, sold its stake to Borse Dubai, when the latter through a complex deal acquired OMX and sold it to Nasdaq for 19.9 per cent stake in NasdaqOMX.
While Borse Dubai continues to own 22 per cent stake in the LSE, there has been speculation that the Dubai entity would eventually sell its stake to Qatar. Although Borse Dubai mai-ntains that it has no immediate plans to sell its stake in LSE, Borse officials said in February that in the future if Qatar shows interest in its shareholding in LSE, it might consider their offer.
In September, Borse Dubai bought a 28 per cent stake in the LSE. Although Qatar failed to acquire Nasdaq's stake in LSE, it bought about 20 per cent stake in the London bourse. Both groups' stakes have since been diluted, following the LSE's merger with Borsa Italiana. Borse Dubai now holds 22 per cent and QIA owns 15 per cent.
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