SINGAPORE (June 29): Singapore Exchange (SGX) will acquire the remaining 80% in cloud-based forex trading platform BidFX from its other shareholders for a total cash consideration of US$128 million ($178.3 million).
Since BidFX’s establishment in January 2017, average daily volumes have grown at a compounded annual growth rate (CAGR) of 57% to US$31 billion in May 2020.
The move will expand SGX’s reach beyond forex futures into the global forex over-the-counter (OTC) market.
SGX first acquired a 20% stake in BidFX in March 2019 as part of its multi-asset strategy to build forex into another core pillar of growth.
The forex market is the largest financial market in the world, with an average daily turnover in the OTC market amounting to US$6.6 trillion by traded volume.
In a Monday statement, SGX said the synergies between the two companies, along with the opportunity to support international forex participants from pre-trade data and analytics, and trade execution to post-trade clearing, “propelled” SGX to purchase the remaining stake.
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The acquisition is expected to be completed in July.
“The future of FX lies in the ability for market participants to benefit from price discovery, liquidity and transparency for both OTC and listed futures trading, in a single unified venue,” says Loh Boon Chye, CEO of SGX.
“BidFX is ahead of the curve in developing sophisticated electronic FX trading and workflow solutions. With BidFX as part of the SGX Group, we can now serve a wider FX community with more comprehensive solutions and enhanced distribution capabilities, while bringing together the two growing and mutually-reinforcing pools of liquidity,” he adds.
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“We are delighted to join the SGX group of companies and combine forces with the largest FX futures marketplace in Asia. We will be, amongst other plans, expanding our coverage to include FX futures, which gives sophisticated investors a hedge to access the broader market across OTC and futures liquidity pools,” says Jean-Philippe Male, CEO of BidFX.
As at 9.07am, shares in SGX were changing hands 5 cents lower, or 0.6% down, at $8.16.
