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> ASX, Singapore Stock Exchange to join forces
> Andrew Main From:The Australian October 23, 2010 12:00AM
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> ASX and Singapore stock exchange to merge Source: The Australian
> A MERGER between ASX Limited and the Singapore Stock Exchange
> continues a sweeping consolidation among global stockmarket operators.
>
> The markets are facing upstart rivals and pressure on the fees they
> charge market participants.
>
> The Australian revealed online yesterday that Singapore Exchange, a
> combined equities and futures market operator, was close to making a
> takeover bid for its equivalent in Australia, ASX.
>
> The combined entity would be worth more than $14 billion and would
> retain listings in both Singapore and Australia.
>
> Greg Bundy, a former CEO of Merrill Lynch Australia, said such a
> merger move would be "absolutely in line" with the trend that has
> seen the Amsterdam, Paris and Brussels Euronext exchanges form an
> alliance with the New York Stock Exchange, and the London Stock
> Exchange link up with its Rome equivalent.
>
>
> Related Coverage
> Asian bid for $14bn merger with ASX The Australian, 2 hours ago
> Stocks follow Wall Street higher The Australian, 2 hours ago
> ASX in talks with Singapore exchange The Australian,10 hours ago
> ASX ready for newcomersThe Australian, 19 Aug 2010
> A fair share of the spoilsThe Australian, 6 Jul 2010
>
> "Singapore and Australia are the most progressive of the exchanges
> in this time zone, they are the market leaders, and it could be they
> are getting together to pre-empt the involvement of Japan and Hong
> Kong, both of which have had their issues."
>
> ASX chief executive Robert Elstone conceded on September 28 after a
> report by John Durie in The Australian that ASX had held talks with
> other exchanges around the world about possible mergers. It is now
> clear the specific impetus was a tie-up with the nation's nearest
> equivalent market manager.
>
> UBS is advising ASX and Morgan Stanley is acting for the Singapore
> Exchange.
>
> ASX shares jumped sharply yesterday, climbing 86c to $34.96, before
> ASX management put its shares in a trading halt less than half an
> hour before the close.
>
> "A party has recently reactivated confidential discussions with ASX
> concerning a possible business combination," said a note from ASX
> counsel Amanda Harkness to the Australian Securities & Investments
> Commission, which since August 1 has been real time trading
> supervisor.
>
> All the major global exchanges are listed and their stock prices
> have been forced down in recent years by a combination of the global
> financial crisis, which reduced revenues, and competition.
>
> ASX shares are 42 per cent below their peak of $60.59 set at the end
> of 2007, while Singapore Exchange shares have suffered an almost
> identical fate, dropping 41 per cent over the same period.
>
> SGX is the stronger of the two, trading at 27 times forecast 2010-11
> earnings, compared with the ASX's 17 times multiple.
>
> ASX has long controlled share trading in Australia, but is getting
> ready for competition in the shape of the Nomura-owned Chi-X, which
> hopes to have a rival market in Australia up and running in the
> first quarter of 2011.
>
> The government of Singapore has in recent years been setting up the
> city state as a financial hub in the same way that last year's
> report in Australia by former Macquarie Bank deputy chairman Mark
> Johnson said this country should be doing.
>
> Expert analysts believe there is a significant complementarity
> between Singapore's need to strengthen expertise in its financial
> services sector at the same time as Australian institutional
> investors need to find a wider investment universe.
>
> The weight of government-mandated superannuation funds in Australia,
> already calculated at more than $1 trillion and heading for an
> estimated $5 trillion by 2030, is seen by experts as having created
> a growing imbalance in asset allocation, given the near absence of a
> bond market in Australia and a heavy focus on locally listed stocks.
>
> Singapore, meanwhile, has been filling up with fund managers
> operating on behalf of European-based organisations that prefer to
> cover the Asia-Pacific region from the city state, comforted by the
> knowledge that they are now only one long flight away from home base.
>
>