- Patrick Young
Summary
Are ASX and SGX increasingly irrelevant as exchanges or do they have a role to play? – Indeed does their merger have greater relevance still for shareholders and traders? Then again there are significant regulatory issues to be overcome…could it all be smoke and mirrors?
Analysis
SGX CEO Magnus Bocker gained incalculable M&A experience from leading the independent OMX into the arms of NASDAQ during a frantic round of deal-making,.
Thus Bocker arrived at SGX as CEO with a subtly different pedigree to his forerunners.
The concept of doing a deal across borders is one which makes a great deal of sense for SGX although the notion of Australian openness to capital markets activity on a regional as opposed to a purely nationalistic basis, is essentially unproven.
With a Chi-X challenge mustering itself close to the gates of the ASX, this may seem like a curious deal. At the same time, the opportunities for synergy are great, if not the usual dull precision cost-cutting stuff. ASX is a rare bird, the IT pioneer and first mover of demutualisation which basically failed to take advantage of the situation and has for the past decade been run on a basis of extreme cost-cutting by a largely unimaginative management team. The returns have been squeezed but the innovative thrusts of ASX and SFE have been all but extinguished.
In the region, the masses are myopically fixated with China,. From rare earth mineral corners to African investment, it seems China will dominate proceedings in the region, if not the world. Yet that is to entirely ignore the fact that SGX allied with ASX can create a fascinating parallel trading universe for investors with sound government practices at the core of the business model. There are going to be many opportunities within South_east Asia for decades to come at multiple different levels of scale, alongside the China option.
In essence, there is much more to this deal than merely the desperate act of two blacksmiths shops merging their operations to take on the insurgent motor car.
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