As global bourses come to terms with the failure of the latest mega-merger, the Singapore Exchange (SGX) is sticking to its incremental approach.
The SGX, which tried to buy ASX in a deal rejected by the Australian government in 2011, still wants to strike deals, though another blockbuster expedition is unlikely.
Instead, the bourse is eyeing potential acquisitions in financial technology as well as of firms that complement existing capabilities, according to its recently appointed equities head.
"It is very difficult to persuade another exchange that you want to buy them and then take up lots of costs, precisely because these are national infrastructures," Mr Michael Syn, who oversees both the stock and futures markets as head of equities, said in a recent interview. "That is very hard to do in very regulated marketplaces."
The softly-softly strategy may make it hard for the SGX to catch up with other Asia-Pacific players, especially Hong Kong Exchanges and Clearing (HKEX), which has a market capitalisation about six times larger than that of its Singapore rival.
However, HKEX lost a chance to jump even further ahead with its decision last week to abandon a £29.6 billion (S$51 billion) takeover bid for London Stock Exchange Group.
Recent SGX deals have included investment in companies such as BidFX and 1exchange, a platform that uses blockchain technology to record trades of private securities.
What SGX shares have gained so far this year, compared with the 1.4 per cent gain in Singapore's benchmark index and HKEX's 4.7 per cent rise.
Besides scouting for suitable acquisitions, Mr Syn said the SGX is working on some projects that play to its strengths as a stable, higher-yielding market at a time of weakening global economic growth.
Mr Syn said he views delistings and the lack of big initial public offerings (IPOs) here as part of the natural market cycle, though both factors have been seen as constraining the growth of the equity market.
Just this month, South-east Asia's biggest property portal, PropertyGuru, kick-started plans to list on the Australian stock exchange, more than 10 years after being founded in Singapore.
An IPO "is not a hunting exercise", said Mr Syn. Most of the process is driven by the issuer and the bankers, so the job of the exchange "is to make sure that your platform is ready, that you have the right to play and the right to win when someone comes along". He sees secondary fund-raisings continuing to make up most of what the SGX offers in terms of new capital formation in the next two years.
So far this year, SGX shares have gained more than 17 per cent compared with the 1.4 per cent gain in the city-state's benchmark index and HKEX's 4.7 per cent rise.
Here are the initiatives Mr Syn, who took on the equities role in June after leading the bourse's derivatives business, is looking at:
•Launching more single-stock futures, starting with Singapore shares. Though the SGX has not announced a date, Mr Syn said the launch horizon for such products is typically a year or less. The SGX already offers single-stock futures on Indian equities.
•Introducing derivatives on freight capacity, meeting demand from ship owners; the SGX is also looking at products that allow for the purchase of container freight places, rather like booking a hotel or a flight on Expedia.
•Setting up systems that allow retail clients to trade via social media applications such as Facebook's WhatsApp or Tencent Holdings' WeChat.
One area where it has put on the brakes is cryptocurrency, Mr Syn said. The SGX had looked at offering physical bitcoin futures, along the lines of Intercontinental Exchange's Bakkt unit. But after studying the technology, the SGX could not overcome concerns about becoming a bitcoin custodian.
"We figured we could make it reasonably hackproof, but there would be contagion on the reputation if there's a breach, regardless of insuring away the financial loss," Mr Syn said.