Reuters: Global Markets: Shares in HK exchange operator fall on $2.2 billion LME buy

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Shares in HK exchange operator fall on $2.2 billion LME buy Jun 18th 2012, 02:23 HONG KONG | Sun Jun 17, 2012 10:23pm EDT HONG KONG (Reuters) - Shares in Hong Kong stock exchange operator HKEx fell more than 2 percent in early trade on Monday after many analysts said its $2.2 billion deal to buy London Metal Exchange was expensive. Hong Kong Exchanges and Clearing Ltd (0388.HK) is paying 58 times LME's adjusted 2011 earnings to get access to the commodities trading platform. That compares with an average price-to-earnings multiple of 37.4 for similar deals in the past, according to Credit Suisse estimates. Initial signs on Monday were that shares in HKEx would open higher, but instead they fell and at 0135 GMT were down 2.7 percent at HK$109.40, while the benchmark Hong Kong stock exchange .HSI was up 1.5 percent. HKEx beat out major global exchange operators, including IntercontinetalExchange Inc (ICE.N) and CME Group Inc (CME.O), to win the deal, which comes as HKEx's mainstay business of cash equities trading is going through a particularly rough patch. Average turnover on the exchange is threatening to dip below levels last seen in the aftermath of the Lehman Brothers bankruptcy in 2008, and the exchange is also set to lose its crown as the world's top IPO destination.

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