World Stock Exchanges are Integrating/Consolidating/Merging: What Could be Done by Arab Exchanges?

Abstract

The paper asserts that the traditional role played by stock exchanges i.e. self-regulatory, controlled and governed by members or governments is being questioned due to the spectacular advances in information technology, globalization, growing competition, institutionalization, which in turn has put more emphasis on the need for stock exchanges to change their governance structure in order be more cost efficient, transparent and widely accountable. As a result, stock exchanges started changing their structures and then integrated/consolidated/merged/allied with other exchanges either domestically or borders. The second section of the paper confirms that likewise, Arab Stock Exchanges have no choice but to prepare for the changes taking place in the securities industry globally. The option of establishing one Arab Exchange is a long process that must better start an easier form of integration cross membership. Any form of integration among Arab Exchanges require political determination as well as economic justification. The authors believe, it would be better, if Arab Exchanges are first restructured and become private prior to thinking of regional mergers/alliances. This is because private exchanges can better judge, which alternatives will best fit their long-term strategies, survival, profitability etc. rather than having government-imposed integration/alliance solutions, that are doomed to failure.