Wednesday, 27 October 2010

Is bigger - better ?

The Singapore Stock exchange ( SGX ) has launched a bid to buy the Sydney based Australian Stock exchange ( ASX ). That is not the term being used. The more sympathetic " merger " is suggested, to create the world's fifth largest bourse.

This is something to be approached with great caution. The first question should be - " Whats in it for us ? "

Existing ASX shareholders will make a motza. The offer is generous, but what is unclear is what rules will prevail in the merged body. The Singapore government owns twenty-five percent of the SGX - and has an appalling human rights record. Can it be trusted to run a honest and reliable institution dealing with the public's money ?

It is suggested that such a merger will open the flood of Asian money available to create new ventures here in Australia. Our door is open to those who want to invest in this country - but they are required to do so within our rules and that is why the ASX has a reputation for being open and honest.

Before this acquisition goes any further Canberra needs to know precisely what source of regulations will govern the merged body - and what standards will apply.

Bigger is not necessarily better ! The last thing we need is a stock exchange with dodgy ethical standards and a lack of accountability.

This offer needs to be put under the spotlight !

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