ID :
174124
Fri, 04/08/2011 - 14:31
Auther :
Shortlink :
http://m.oananews.org//node/174124
The shortlink copeid
SGX bid rejection a no brainer: Swan
SYDNEY, April 8 (AAP) - Treasurer Wayne Swan has blocked the takeover of Australia's stock exchange by the Singaporean bourse, saying it would not be in the national interest.
But in announcing his decision to reject the ASX/SGX deal, Mr Swan said he had an open mind to a possible future merger.
In the end, after six months of deliberation, the treasurer said his decision was a "no brainer".
"Let's be clear here: this is not a merger, it's a takeover," Mr Swan told reporters in Canberra on Friday.
"The deal would make ASX a junior partner to a smaller regional exchange. It was a no-brainer that this deal is not in Australia's national interest."
The ASX ranks 11th in size in the world with $1.5 trillion worth of listed companies, whereas the SGX ranks 21st at $0.672 trillion.
Mr Swan said there was no clear evidence the deal would have enhanced the operation of the exchange and there was a risk it could see jobs and capital moving to Singapore.
"At the end of the day this takeover was more about growing Singapore's financial sector than Australia's.
"The deal just doesn't stack up whatever yardstick you use."
Mr Swan said it was in the national interest for Australia to maintain the ongoing strength and stability of its financial system and to ensure it was well placed to support the Australian economy in the future.
"It is important that we continue to build Australia's standing as a global financial services centre in Asia to take best advantage of the benefits of our superannuation savings system," he said.
"I had strong concerns that the proposed acquisition would be contrary to these objectives."
The treasurer said it would have been very difficult to ignore advice against the merger.
"I've gotta say I was frankly surprised how strong (the Foreign Investment Review Board) was in its advice to me to reject the application," he said.
"I couldn't stand here as treasurer and approve an application ... which was advised against by every single regulator I'm responsible for."
There was strong advice that ceding regulatory control of the exchange would raise serious risk to the stability of Australia's financial system.
Mr Swan has asked the Council of Financial Regulators to look carefully at measures which could be introduced to ensure the continued protection of Australian issuers, investors and market participants in the event of a future merger.
"It is absolutely critical that we take these steps now to put in place any reforms needed to protect our financial system stability should the ASX find a deal that is right for Australia," he said.
Although rejecting the SGX deal, Mr Swan said government policy was to welcome foreign investment when it was in the national interest.
No proposal had been rejected since 2001, he said.
Since Labor came to government more than 99 per cent of applications had been approved without conditions.
Australian Greens leader Bob Brown, who had expressed concerns a takeover would have raised sovereignty issues, said the treasurer had made the right decision.
"In the future this will be seen as a very good outcome," Senator Brown said in a statement.
But in announcing his decision to reject the ASX/SGX deal, Mr Swan said he had an open mind to a possible future merger.
In the end, after six months of deliberation, the treasurer said his decision was a "no brainer".
"Let's be clear here: this is not a merger, it's a takeover," Mr Swan told reporters in Canberra on Friday.
"The deal would make ASX a junior partner to a smaller regional exchange. It was a no-brainer that this deal is not in Australia's national interest."
The ASX ranks 11th in size in the world with $1.5 trillion worth of listed companies, whereas the SGX ranks 21st at $0.672 trillion.
Mr Swan said there was no clear evidence the deal would have enhanced the operation of the exchange and there was a risk it could see jobs and capital moving to Singapore.
"At the end of the day this takeover was more about growing Singapore's financial sector than Australia's.
"The deal just doesn't stack up whatever yardstick you use."
Mr Swan said it was in the national interest for Australia to maintain the ongoing strength and stability of its financial system and to ensure it was well placed to support the Australian economy in the future.
"It is important that we continue to build Australia's standing as a global financial services centre in Asia to take best advantage of the benefits of our superannuation savings system," he said.
"I had strong concerns that the proposed acquisition would be contrary to these objectives."
The treasurer said it would have been very difficult to ignore advice against the merger.
"I've gotta say I was frankly surprised how strong (the Foreign Investment Review Board) was in its advice to me to reject the application," he said.
"I couldn't stand here as treasurer and approve an application ... which was advised against by every single regulator I'm responsible for."
There was strong advice that ceding regulatory control of the exchange would raise serious risk to the stability of Australia's financial system.
Mr Swan has asked the Council of Financial Regulators to look carefully at measures which could be introduced to ensure the continued protection of Australian issuers, investors and market participants in the event of a future merger.
"It is absolutely critical that we take these steps now to put in place any reforms needed to protect our financial system stability should the ASX find a deal that is right for Australia," he said.
Although rejecting the SGX deal, Mr Swan said government policy was to welcome foreign investment when it was in the national interest.
No proposal had been rejected since 2001, he said.
Since Labor came to government more than 99 per cent of applications had been approved without conditions.
Australian Greens leader Bob Brown, who had expressed concerns a takeover would have raised sovereignty issues, said the treasurer had made the right decision.
"In the future this will be seen as a very good outcome," Senator Brown said in a statement.
