Dubai heads for a new stock home

And the most recent strategic strike could prove to be the daddy of them all. First came last year's rather xenophobic US resistance to an Arab company (DP World) taking over six of its prized ports due to questions (mainly Hillary Clinton's) over security; last week saw Japan's Fast Retailing finally let go of the world's most expensive coathanger (Barneys of New York) to Dubai's Istithmar; while the last week has seen the normally placid Swedes weigh up whether a two week-old Gulf stock exchange holding company should take a majority stake in its own stock market.

Unfortunately, the standard question has once again reared its ugly head - why should a Swedish company sell out to Arabs? But whether it is Arabs or Albanians it is of no consequence, this is no ordinary business.

The matter of protectionism can be more easily understood when you consider that Borse Dubai is attempting to gain control of a privately-run stock exchange company, not just a run-of-the-mill 100 year-old Swedish rollmop business.

Then again, many have also asked why on earth Dubai is strategically plotting to gain control of a Swedish exchange. A Swedish exchange? What sort of power does that have within global markets?

But as with everything the UAE's investment arms attempt, this move is nothing short of measured, and from every angle. What many people don't realise is that OMX is considered a world leader in financial trading systems and, formed on August 31, 2004, is almost as young as Dubai's own stock market.

On May 25, US exchange NASDAQ agreed to buy OMX for US$3.7bn to form the NASDAQ OMX Group and thought it had won. Borse Dubai, however, acquired an initial 4.9% stake in OMX for US$34 a share and has now entered into option agreements to raise its stake to 27.4% at the same price. Nasdaq bid a significantly lower US$30.90 a share.

Despite being only a fortnight old, the oddly spellt Borse has seemingly done the impossible and strategically outplayed and outmuscled another US organisation. OMX is keen, very keen in fact, on Borse's bid, however, as with any major foreign market move, there still remain a few potential stumbling blocks. Firstly, Borse needs to clarify whether or not it is officially making a bid to take over OMX. Secondly, NASDAQ could potentially ups its bid. Thirdly, a horde of hedge funds have swooped in at the last minute to buy 25% of OMX's stock in the event of a takeover bid, and finally OMX's CEO has publicly stated his concerns over the transparency and regulation of a market owned by just one shareholder. Whatever happens - and for the record I believe Borse will win through - this is surely one of the most absorbing tugs of war that has ever taken place between the US and an Arab nation.