Singapore bourse in bid for rival
By Alex Kennedy |
October 26, 2010, Tuesday
|
Print Edition
Print Edition
THE Singapore Exchange Ltd said yesterday it is making an US$8.3 billion cash and shares takeover offer for the operator of the Australian bourse, aiming to vault from second-tier stock market to leading Asian finance center.
The combined exchange company would be the world's fifth-largest by market value and rank as the second largest stock market in Asia by number of listed companies, the two exchanges said in a joint statement. By other measures it would still rank behind Tokyo, Hong Kong and Shanghai.
The deal aims to give both exchanges a better chance of prospering amid increased competition within Asia and as cross-border trading platforms like Chi-X Europe usurp the dominance of established stock exchanges.
"They had to do a deal like this or run the risk of being marginalized," said Lorraine Tan, head of equity research with Standard & Poor's in Singapore. "China's listings are huge, and neither Singapore nor Australia has those kinds of hinterland listings you can rely on."
The Australian Securities Exchange Ltd, known as ASX, is set to lose its monopoly on operating a stock market in Australia in 2011 and an affiliate of Chi-X Europe is planning to set up a trading system once the monopoly is abolished. Singapore, meanwhile, has long lagged behind Hong Kong and Tokyo as a regional financial center.
"The capital flow we see today is really changing from West to East," Singapore Exchange chief executive Magnus Bocker said. "This will be the gateway to Asian capital markets."
The exchange operating company formed from the takeover of ASX would have a market value of US$12.3 billion and be responsible for some 2,700 listed companies.
According to September data from the World Federation of Exchanges, the combined exchange would list companies worth about US$1.9 trillion, fourth most in Asia behind Tokyo, Hong Kong and Shanghai.
Companies traded on the New York Stock Exchange have a total market capitalization of US$12.3 trillion, the most in the world.
Combined trading volume of the Singaporean and Australian exchanges was worth about US$1 trillion during the first nine months of the year, sixth-most in Asia and far behind global leader NYSE which has had volume worth US$13.8 trillion in the January-to-September period.
The takeover offer of 48 Australian dollars (US$47.11) per share is 37 percent higher than ASX's last traded price on Thursday - a day before its shares were halted from trading pending an announcement on the deal.
It comprises A$22 cash plus 3.473 shares in the Singapore Exchange for each share in the Australian stock exchange operator.
The combined exchange company would be the world's fifth-largest by market value and rank as the second largest stock market in Asia by number of listed companies, the two exchanges said in a joint statement. By other measures it would still rank behind Tokyo, Hong Kong and Shanghai.
The deal aims to give both exchanges a better chance of prospering amid increased competition within Asia and as cross-border trading platforms like Chi-X Europe usurp the dominance of established stock exchanges.
"They had to do a deal like this or run the risk of being marginalized," said Lorraine Tan, head of equity research with Standard & Poor's in Singapore. "China's listings are huge, and neither Singapore nor Australia has those kinds of hinterland listings you can rely on."
The Australian Securities Exchange Ltd, known as ASX, is set to lose its monopoly on operating a stock market in Australia in 2011 and an affiliate of Chi-X Europe is planning to set up a trading system once the monopoly is abolished. Singapore, meanwhile, has long lagged behind Hong Kong and Tokyo as a regional financial center.
"The capital flow we see today is really changing from West to East," Singapore Exchange chief executive Magnus Bocker said. "This will be the gateway to Asian capital markets."
The exchange operating company formed from the takeover of ASX would have a market value of US$12.3 billion and be responsible for some 2,700 listed companies.
According to September data from the World Federation of Exchanges, the combined exchange would list companies worth about US$1.9 trillion, fourth most in Asia behind Tokyo, Hong Kong and Shanghai.
Companies traded on the New York Stock Exchange have a total market capitalization of US$12.3 trillion, the most in the world.
Combined trading volume of the Singaporean and Australian exchanges was worth about US$1 trillion during the first nine months of the year, sixth-most in Asia and far behind global leader NYSE which has had volume worth US$13.8 trillion in the January-to-September period.
The takeover offer of 48 Australian dollars (US$47.11) per share is 37 percent higher than ASX's last traded price on Thursday - a day before its shares were halted from trading pending an announcement on the deal.
It comprises A$22 cash plus 3.473 shares in the Singapore Exchange for each share in the Australian stock exchange operator.
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