Australia Defends ASX-SGX Rejection

Australia is facing growing criticism over its move to block a proposed takeover of its national stock exchange operator (ASX) by the Singapore exchange (SGX).

Critics call the decision a political one, amid falling approval numbers for the ruling coalition.

Apart from fears the Australian exchange would be left behind by global stock exchange consolidation, there are also concerns future foreign investment in the country could be affected.

But Treasurer Wayne Swan is defending the move, saying Australia welcomes foreign investment, provided they serve the country’s interest.

Swan did not specify the reasons for his preliminary rejection, as he wants to give the SGX a chance to respond to his concerns.

The Singapore government’s indirect 23 percent stake in SGX is seen as the main stumbling block to Australian regulatory and political approval.

SGX says it has no plans to withdraw its $7.8 billion bid for now, and reports indicate the bourse is expected to talk to the Australian Foreign Investment Review Board before a final recommendation on April 11.

But investors believe the deal is all but dead.

ASX shares were flat Wednesday after falling 3.3 percent Tuesday.

SGX shares edged up, after a 4.5 percent rise the day before.

Foto: NTD