Japan Exchange Group (JPX), the operator of the Tokyo Stock Exchange has announced that it will sell its entire 4.95% stake in Singapore Exchange (SGX) progressively over a period of about three years.
The decision to divest its shares in SGX, believed to be worth about 32 billion yen ($301 million), is JPX response to a government Corporate Governance Code which discourages listed companies from holding shares for purposes other than pure investment.
The Code, introduced in 2015, requires companies to examine and explain the economic rationale and future outlook of any strategic holdings.
“Following a review of the requirements under the Code, JPX reached the conclusion that the existing cooperative relationship with SGX would continue even without holding the shares of SGX,” the statement said.
The company noted that it acquired the shares of SGX in June 2007 with the aim of constructing a cooperative relationship with SGX while taking into consideration the various alliances among exchanges abroad at that time.
The two companies later further enhanced their cooperation through entering into the letter of intent for mutual cooperation in 2014, to jointly promote measures that contribute to the increase in mutual corporate values.
The stake of SGX was initially acquired by Tokyo Exchange Inc. in 2007 for a reported 37.4 billion yen. Later in 2013, following a drop and rebound of the shares, Tokyo Stock Exchange merged with Osaka Securities Exchange in 2013 to form Japan Exchange Group.