SGX-ASX Hopes Rise on New Mergers and Acquisitions

Shares of Australian stock exchange operator ASX soared over five percent Thursday, as a wave of consolidation swept global stock exchanges.

With Deutsche Borse and the London Stock Exchange pursuing their own acquisitions, investors are hoping the Australian government would look favorably on the proposed $7.9 billion takeover by the Singapore Exchange (SGX).

Analysts agree the new takeover announcements would strengthen the case for a tie-up, but domestic political issues could hamper the process.

Australia’s competition commission has cleared the proposed SGX-ASX merger, but the bid still requires parliamentary approval.

Ironically, some traders like Andreas Lipkow in Frankfurt, say it was the SGX-ASX deal in the first place, that led to the Deutsche Borse’s bid for the NYSE.

[Andreas Lipkow, MWB Fairtrade Securities Trading Bank]:
„For the global financial market I think this is just the consequences of other mergers, for example the Singapore stock exchange with ASX (Australian Securities Exchange) and today, we saw the offer from London stock exchange for the Toronto stock exchange. So I think it’s a very logical step.“

SGX shares rose to a two week high near the start of trade in Singapore. The latest deals also mount pressure on other Southeast Asian exchanges, which have avoided mergers so far because of tight ownerships and political concerns.

But analysts are mixed on further Asian tie-ups.

Ernst and Young says exchanges need to attract companies beyond their domestic markets and liberalize ownership before this can take place, with HK Exchange and Bursa Malaysia possible immediate candidates.

Foto: NTDTV