* Turkey promoting Istanbul as financial hub
* Stock, gold and derivatives exchanges merging
* Bourse aims to finalise talks by July
By Seda Sezer and Ebru Tuncay
ISTANBUL, May 8 Turkey is in talks with the
London Stock Exchange and Nasdaq about a
partnership deal that could see it sell a stake in the Istanbul
bourse as part of a drive to promote the city as a financial
hub, its deputy prime minister said.
Turkey is in the process of merging the Istanbul Stock
Exchange, the Gold Exchange and Derivatives Exchange into Bourse
Istanbul - an important step in the government's bid to
privatise the company and create a regional financial centre.
"We are holding talks with London and Nasdaq for strategic
partnerships on Bourse Istanbul," Deputy Prime Minister Ali
Babacan told reporters at a conference on Wednesday.
Once the Bourse settles on a strategic partner, which could
involve it selling a stake in return for technology support, it
will also seek opportunities for co-operation with other
exchanges, such as cross-listings or joint indexes.
Bourse chairman Ibrahim Turhan said talks were continuing
with international organisations including Deutsche Boerse
and the CME Group, owner of the Chicago
Mercantile Exchange (CME), as well as Nasdaq and the LSE.
"Our aim is to finalise talks by July and progress to the
level of signing a memorandum of understanding," Turhan said.
Bourse Istanbul has said the state will retain a 49 percent
stake but will divest a stake of up to 41 percent, part of it
through a flotation. It has not given further details. The
remaining 10 percent is held by other investors.
"There is an IPO plan for around a 20-25 stake and the rest
is planned to be sold in smaller stakes to other bourses,
investment banks, a technology provider or hedge funds," a
source familiar with the partnership talks told Reuters.
"Instead of such a fragmented structure, a bigger stake sale
to a single strategic investor of this 41 percent would be more
efficient," he added.
Turhan said last year the company wanted to decide on future
strategic partners by the middle of this year and that other
bourses, technology firms, sovereign wealth fund managers and
investment banks were interested.