Dubai Buys 20 Percent of Nasdaq Stock Market
The Nasdaq Stock Market is selling a nearly 20 percent stake to Borse Dubai and is taking control of the Nordic exchange operator OMX as part of a sweeping settlement of their battle for control of OMX.
In a global stock market shakeup, Borse Dubai and a group from Qatar also moved to become the largest stakeholders in the London Stock Exchange.
But the transactions involving Dubai and Nasdaq could face scrutiny in the United States, where a Dubai-owned company’s plan to manage some U.S. ports previously raised an uproar.
Economic experts say the Persian Gulf states, flush with cash from soaring oil revenues, are buying overseas assets at a record rate, as they seek to diversify their economies beyond oil wealth.
Other experts point to the plummeting value of the U.S. dollar, which was at a record low against the Euro Thursday and on par with the Canadian dollar for the first time in more than 30 years. The weak dollar makes American assets cheaper to overseas buyers, who then step up their purchases. This in turn can create political tensions.
A bid 18 months ago by another state-owned company in Dubai to purchase operating rights at six U.S. ports unleashed a firestorm in the U.S. Congress, which ultimately killed the deal.
House Speaker Nancy Pelosi, a Democrat, said she would like to learn more about the Nasdaq deal, but it does not appear to raise the same concerns as the port sale did.
“I don’t know if it’s raised alarm bells, but it has raised some questions. And I think it’s quite a different issue than the ports issue because that really was a security issue, this is a marketplace issue,” he said.
At a news conference, President Bush also indicated he will take a cautious approach, but he is not opposed to the deal.
“We are going to take a good look at it, as to whether or not it has any national security implications involved in the transaction. And I’m comfortable with the process to go forward,” he said.
Legal experts say the transaction will face scrutiny on Capitol Hill and by U.S. government agencies. But the biggest challenge to the Nasdaq-Dubai deal may be Qatar, and its own acquisition ambitions.
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