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Sydney -The head of Australia's stock exchange on Tuesday rejected criticism of a proposed $8.3bn tie-up with the Singapore bourse, saying the takeover did not go against the national interest.
ASX chief executive Robert Elstone said the company would this month lodge its application with Canberra for approval for the merger, which aims to create the world's fifth largest exchange, rivalling Tokyo and Hong Kong.
"We can't see how this is contrary to the national interest," Elstone told Dow Jones Newswires. "The combined exchange will be both more regionally relevant and globally relevant than the sum of is parts.
"The attractiveness of a combined pool of listings and a combined pool of liquidity would make this combination unique."
The proposed takeover by the Singapore Exchange faces political opposition in Australia, where some lawmakers have argued against allowing foreign ownership of the bourse while others criticised the city-state's rights record.
The takeover requires approval from both Australia and Singapore and lodging an application with Australia's Foreign Investment Review board is among the first steps the companies must take to push forward the deal.
Australian independent MPs, who hold the balance of power in Canberra, have vowed to block the merger on grounds that it is not in the national interest.
The conservative opposition has also raised concerns over competition in the finance sector and control over the Australian Securities Exchange.
But Elstone said it was "simply impossible for foreign influence to breach the Corporations Act of Australia."
Singapore's state investment firm Temasek Holdings has also sought to dispel claims of political motivation behind the transaction, denying it plays any role in running the SGX.
Temasek, which has a 23.45% stake in the Singapore Exchange through a special purpose vehicle, said it was not involved in the running of the bourse, in a letter to Australian media posted on its website and dated October 31.
"Our board and management make our investment, divestment and other company decisions on a commercial basis, independently of our shareholder, the Singapore government," executive director Simon Israel said in a letter.
"Temasek plays no part in the governance, operations or investment decisions of the Singapore Exchange," he said.
Elstone said the merger could prompt greater consolidation among exchange operations elsewhere seeking to increase their access to capital.
"It may trigger the Japanese exchanges to contemplate cross-border hook-ups outside the region," he said.
- AFP
