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Sun 17 Feb 2008 02:31 PM

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Dubai considers exchange sale to Qatar

Borse Dubai contemplates selling stake in London Stock Exchange to Gulf state.

Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term.

Borse Dubai and the Nasdaq Stock Market should close a deal this month to buy Nordic and Baltic stock exchange OMX. Under the tie-up, Borse Dubai gets Nasdaq's stake in the London Stock Exchange (LSE).

"If the Qatari government wants to strike a deal in the future ... then we would consider it," Borse Dubai Chairman Essa Kazim told reporters.

Any stake sale would "absolutely not" occur in the short term, added Soud Ba'alawy, the firm's deputy chairman.

Qatar owns 15% of the LSE through the Qatar Investment Authority (QIA), its $60 billion sovereign wealth fund.

The QIA planned to use its stake in the LSE to develop its own capital markets, a person familiar with the fund told newswire Reuters last month.

QIA subsidiary Qatar Holding and Borse Dubai were in talks for Qatar to exchange its 10% stake in OMX for at least part of Dubai's stake in the LSE, people familiar with the matter said in December.

Borse Dubai had not agreed on any deal with Qatar on selling its stake, Kazim said.

Qatar, with a population of 1 million and holder of the world's third-largest natural gas reserves, is looking to use its petroleum wealth to diversify its economy. The QIA in November dropped its 10.6 billion pound bid for J. Sainsbury Plc, Britain's third-largest supermarket group.

Under the OMX deal, Nasdaq agreed to take a 33% stake in the Dubai International Financial Exchange (DIFX), set up by the government of Dubai in 2005 to operate according to international regulatory standards.

The exchange, to be re-branded as Nasdaq DIFX, planned to expand in the Middle East, Africa and Asia, Kazim told reporters. (Reuters)

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