Tokyo bourse says in alliance talks with LSE

TOKYO, Nov 6 (Reuters) The Tokyo Stock Exchange, Asia's biggest bourse, said on Monday it is in talks with the London Stock Exchange about an alliance, the latest step towards realignment among the world's top exchanges.

Japanese business daily Nihon Keizai reported on the tie-up on Saturday, saying it might include cross-listing of exchange-traded funds as well as development of trading systems and strategies for revitalising bourses for start-up companies.

TSE spokesman Toru Onoda said no details have been decided but that a capital alliance has not been discussed.

The Tokyo bourse said last week that it is talking with the New York Stock Exchange on a capital alliance that could bring together the world's two largest equities markets as early as 2009, when the TSE plans to list its shares.

The world's stock exchanges have been increasingly joining hands in alliances and mergers to share the heavy burden of investing in next-generation systems, as well as keep up with competition and the globalisation of information and trading.

Among moves this year, the Nasdaq Stock Market Inc. built up a 25 percent stake in the LSE, the NYSE struck a billion deal to take over Paris-based Euronext, and Chicago's two futures exchanges announced plans to merge.

TSE President Taizo Nishimuro said Asian bourses have leaned towards independent strategies because of several factors including the lack of a common currency and heavy involvement by local bureaucrats in their business development.

He said that trend was about to change.

''Considering the advancement of information technology, it is all but certain that trends seen in the West will spread and we will enter a new stage of international competition that includes Asia,'' Nishimuro told an exchange industry conference.

Earlier this month, Nasdaq signed cooperative agreements with the Korea Exchange and Tokyo-based Jasdaq.

The TSE has said it was looking to form alliances with other Asian bourses, including the possible option of merging with the Korea Exchange.

REUTERS PKS DS1410