Australian Financial Review, October 30 2010
“Based on our vision, this pioneering step will guarantee a truly integrated market based on a common technology platform, creating competitiveness by combining world leading technology with highly efficient markets.” So said Marcus Bocker – but not about Singapore Exchange or the ASX. He was speaking in May 2003, at the merger of OM Technology, a market technology provider and Swedish stock market operator where he was deputy CEO, and HEX Integrated Markets, which ran the exchanges of Finland, Estonia and Latvia.
Many more mergers have followed, but in the intervening seven and a half years the message has remained the same: consolidation, underpinned by technology, to create efficiency, liquidity and scale. All that’s changed since is the size and location of the stages upon which Bocker has operated.
That merger in 2003 set him on the trajectory that has led, eventually, to Sydney. In June that year, he became acting president and CEO of OM. And from then on, he was instrumental in probably the most driven sequence of mergers that have yet taken place in stock exchanges anywhere in the world. In 2004, OMX (as it would be renamed that year) acquired the Vilnius Stock Exchange in Lithuania, and a joint trading platform for all Nordic exchanges was launched. The next year, the Copenhagen Stock Exchange in Denmark came into the fold; a year later, the Iceland Stock Exchange and a stake in the owner of the Oslo stock exchange; and a year after that, the Armenian Stock Exchange. By then, 2007, Bocker had been instrumental in the merger and integration of eight separate exchanges, creating a single Nordic bloc of liquidity with pan-regional benchmark indices and trading platforms.
By then the whole world was contemplating exchange consolidation, and Bocker’s next step was to get on the right side of the inevitable seismic shift that was about to happen: trans-continental mergers. OMX was briefly in the perfect position of a bidding war: Nasdaq offered US$3.7 billion for the company in May 2007, only for Borse Dubai to offer US$4 billion. Eventually the two bidders agreed to work together, with Borse Dubai dropping out in return for a 20% stake in Nasdaq itself. Nasdaq OMX as formally born on February 27, 2008, and the Swede who just four years previously had been trusted to pull together the markets of Stockholm and Helsinki was appointed president of the world’s largest exchange company.
Bocker’s role at Nasdaq was never ceremonial, a shunting upstairs of the executive of a purchased asset; in his time there he was responsible for listings, corporate services and – this theme again – market technology. That phrase is always appended to any description of Bocker’s work wherever he has been; Nasdaq OMX CEO Bob Greifeld, paying tribute to Bocker when he left for Singapore in 2009, spoke of his achievements in building a “ground-breaking, successful exchange and technology company” at OMX, and thanked him for “moving our listings and market technology business forward” at Nasdaq. It was no surprise at all when, upon arriving at Singapore Exchange, he immediately set about implementing the world’s fastest trading system, which will kick into gear next year. In his view, mergers make sense because of the efficiencies they create, and in order to exploit them technology must underpin the whole strategy.
In Singapore, when exchange CEO Hsieh Fu Hua announced his intention to become an executive director and president at the Temasek sovereign wealth fund, Bocker was a very obvious person to call. As explained in the AFR this week, the exchange’s management and board had recognised for years that opportunities for organic expansion were limited and that innovation could only take it so far; smart and cashed up, SGX was always a likely candidate to kick off regional consolidation. In interviews, Bocker tends to eschew any sense of himself as an M&A king, instead preferring to paint himself as an operations man. But the world is full of exchange heads who have set up grand and bombastic memoranda of understanding with their peers for consolidation; many, privately, consider these things meaningless. Bocker had actually rolled up his sleeves and wedged together more Nordic bourses than most people could identify on a map, not just at a company level but to the nuts-and-bolts conclusion of a common platform.
But why did he leave Nasdaq? Bocker does genuinely seem to be driven by a sense that Asia is the future: not just for GDP, which is pretty much a given these days, but also for more market-specific themes like price discovery. Clearly an energetic sort – few profiles have ever been written of him without mentioning he runs marathons, and this won’t be the first – he has been drawn by the idea of taking what’s he learned from the developed world to emerging Asia. Singapore, of course, is not so much emerging as emerged, and Bocker is also likely to have been drawn by the can-do attitude of the place: identify what you want to be, work out what it’s going to cost and go ahead and do it while everyone else is still talking. “Maybe the best way to explain it is to take a joke out of it,” he told Steve Forbes in a TV interview earlier this year. “That the best-run Indian city in the world is Singapore, and the best-run Chinese city in the world is Singapore. Singapore is the Asian gateway.”
One also learns something of both Bocker and the SGX in its decision to partner with dark-pool leader Chi-X rather than to fear or attack it. “Hopefully,” he has said, “we’ll have a stronger position being part of it than being on the outside.”
One doesn’t merge a clutch of Nordic and Baltic exchanges without encountering some hostility, but even Bocker may have been taken aback by the ferocity of the political response to the ASX bid. “If anyone knows how to do it, it is Magnus,” says someone who has worked with him. “He clearly knows what he is talking about and he has a lot of credibility.” But if the ASX deal falls over, don’t be surprised if he merely steers SGX elsewhere; one way or another exchange consolidation is coming to Asia Pacific and it’s just a question of how the pieces end up fitting together.