Australian authorities have been considering how to deal with algorithmic and high-speed trading since 2010. Long story short; the local Australian Financial Review says that the federal Treasury has decided that fees on high frequency trades orders are the way to go.
This prompted protests from the chief of Chi-X Australia, Peter Fowler, that market makers should be treated differently: Read more
Australia has awarded an operating license to Chi-X Australia, paving the way for it to become the first foreign-owned stock exchange in the nation’s 150-year trading history, reports Bloomberg. Just weeks after blocking a proposed A$8.3bn ($9bn) takeover by the Singapore Exchange of ASX, the country’s stock exchange, was blocked by Swan on April 8, Treasurer Wayne Swan and financial services minister Bill Shorten said that “competition in Australia’s financial markets is critical to promoting exchange innovation and lowering transaction costs…” Chi-X, which is owned by Instinet, a subsidiary of Japanese bank Nomura, plans to start operations in the fourth quarter. Read more
Australia has formally rejected Singapore Exchange’s $8.8bn bid for the country’s bourse, describing the decision as a ‘no-brainer’ for the national interest and financial stability, the FT says. Within minutes of the rejection on Friday, SGX and ASX terminated the proposed deal. In response, SGX said it would continue to pursue organic as well as “other strategic growth opportunities”, including further talks with ASX. The Australian government has cited ASX’s monopoly of the country’s clearing and settlement systems, but faces criticism that the decision has really come down to politics.
Canberra formally rejected Singapore Exchange’s A$8.4bn ($8.8bn) bid for its Australian rival, ruling that the takeover could undermine Australia’s position as a financial centre and the stability of its financial system, reports the FT. In a strong statement, Wayne Swan, the country’s Treasurer, on Friday told reporters it was a “no brainer” that SGX’s bid was not in Australia’s national interest and stressed the ASX’s “critically important” clearing and settlement functions. He also revealed that the Reserve Bank of Australia and securities regulator ASIC had opposed the takeover. Swan was widely criticised after indicating on Tuesday that the government was likely to block the takeover. The WSJ warns that the move “risked damaging the country’s appeal to foreign investors”. Read more
“Keep your money mate,” was the way Heard on the Street put it in response to Australian Treasurer Wayne Swan’s decision to effectively block Singapore Exchange’s A$8.4bn ($8.7bn) takeover offer of its local rival ASX.
In a remark that took markets (not to mention the protagonists) by surprise, as he spoke before the end of a standard 30-day review period of the deal, Swan said on Tuesday he was “disposed” to rule the merger was not in the country’s national interest. Read more
The Australian government on Tuesday effectively killed off the Singapore Exchange’s planned A$8.4bn ($8.7bn) takeover of its Australian counterpart after Wayne Swan, the country’s treasurer, said he was “disposed” to reject the deal as not in the national interest, reports the FT. Although Swan stressed his view was preliminary, he startled the market by revealing his position before the end of a standard 30-day review period by the country’s foreign investment regulator. A successful takeover would have created Asia’s second-largest exchange by number of listings, behind the Bombay exchange but ahead of Tokyo and Hong Kong. The Singapore Exchange said it had been invited to provide further comments to Australia’s Foreign Investment Review Board, but people close to the exchange said Canberra had made its position clear. Perhaps, says Lex, the deal was fantasy in the first place. The WSJ’s Heard column says Swan’s position risks turning foreign investors away from the resource-rich nation. Read more
Breaking pre-market news on Tuesday,
- HMV issues another profits warning; covenant test pushed back until July — statement. Read more
The Australian government has been forced to shoot down reports it will reject the Singapore Stock Exchange’s near $8.4bn bid for its Australian counterpart, as politicians opposed to the deal stepped up efforts to block the deal, reports the FT. Wayne Swan, the Australian treasurer who will provide an initial ruling on the deal after taking advice from the country’s foreign investment regulator, on Monday insisted no decision had been made. The Singapore bourse’s agreed A$8.4bn ($8.37bn) cash-and-share offer for the Australian Securities Exchange announced last October would create Asia’s second-largest exchange by the number of listings, behind the Bombay Stock Exchange but ahead of exchanges in Tokyo and Hong Kong. Read more
Technologically speaking all is still not well at the London Stock Exchange, reports FT Alphaville. Prices were being disseminated on Monday morning but anyone trying to enter the LSE website via Google was getting hit with a “reported attack” message. Still, the LSE is not the only exchange with a red face this morning. The Australian Stock Exchange, which like the LSE is merging with a rival, has also suffered an outage. Quotes on Nasdaq’s OMX Nordic exchanges were also failing to update. While this is probably nothing more than coincidence (and note the ASX did install a patch over the weekend), it does make one wonder if there’s something in these industrial sabotage theories. Read more
SGX, the Singapore exchange, improved its bid for Australia’s ASX, agreeing to allow more Australian representation on the merged entity’s proposed board in a push to win regulatory clearance for a deal that has raised national interest concerns in Canberra, reports the FT. The two sides hope the concession will boost their chances of being able to form one of the world’s top five exchanges, as a wave of consolidation sweeps the industry in Europe and North America. In a joint statement, the exchanges on Tuesday said the ASX/SGX board’s size would be cut from 15 to 13, with the number of Australian citizens up by one to five. equal to the number of Singaporean citizens. However, SGX will remain firmly in control with the remaining three so-called “international directors” drawn from its ranks and including Magnus Böcker, chief executive. The WSJ meanwhile warns of Australian political opposition to the deal. Read more
Singapore Exchange on Wednesday said it would launch what it claims will be the world’s fastest trading platform on Aug 15, a $195m project called SGX Reach, reports the WSJ. Also, the exchange said, it would eliminate its 90-minute lunch period to give investors a bigger trading window. The news came on the same day that Hong Kong billionaire Li Ka-Shing said his HK-listed company Hutchison Whampoa would make an initial public offering in Singapore of its Chinese ports business, which it hopes will raise as much as $6bn. The exchange normally struggles to attract big China-related IPOs. As part of its expansion push, SGX is pursuing a deal to acquire Australia’s ASX for $8.4bn. Read more
The bid by Singapore Exchange for ASX, operator of Australia’s main bourse, has gained the green light from Australia’s competition regulator, reports Bloomberg. The deal would not adversely affect competition in exchange services, Australia’s ACCC competition watchdog said on Wednesday, after examining whether the acquisition of ASX would deter entry into the Australian market of rival exchange, Chi-X Australia and other competitors due to SGX’s links with Chi-X Global. The deal still needs clearance from Australia’s foreign investment and securities regulators as well as the central bank; also, some law-makers have raised national-interest concerns. Read more
It seemed like such a good idea at the time…
For Magnus Bocker, chief executive of the Singapore Exchange, SGX’s A$8.1bn ($7.9bn) offer for the larger (but less profitable) ASX was the key to his dream of running a powerhouse exchange. Read more
Singapore Exchange posted its worst two-day drop in two years on Tuesday after its CEO Magnus Bocker on Monday unveiled an $8bn takeover of its Australian counterpart ASX, reports Bloomberg. Australian Green party leader Bob Brown said he would not support the bid and Tokyo Stock Exchange Group, SGX’s second-largest shareholder with a 5% stake, warned it would suffer losses from the deal. TSE chief Atsushi Saito told the FT that Japan’s biggest exchange would consider forming international alliances if SGX’s deal proceeds. His remarks highlighted how the proposed shares and cash offer by Singapore’s SGX for ASX has shaken a region with little experience of cross-border exchange consolidation. Read more
Shares in Australia’s stock exchange have tumbled 7.4 per cent after an $8bn takeover bid by Singapore’s bourse was threatened by Australian legislators, Bloomberg reports. Lawmakers in Australia’s sharply divided parliament are able to derail SGX’s bid because it requires an amendment to corporation law that would allow SGX to own more than 15 per cent of ASX. Regulators are also expected to scrutinise closely the Singapore government’s 23.5 per cent stake in the Singapore Exchange, which dwarfs the next largest shareholding of 4.9 per cent, owned by the Tokyo Stock Exchange, the FT says — but notes that officials in both bourses are still confident of a deal. Read more
Regulators are unlikely to block an A$8.4bn ($8.3bn) bid by the Singapore Exchange (SGX) for its Australian counterpart, ASX, despite significant Singapore government involvement, said officials of both bourses, reports the FT. The agreed bid must gain regulatory approval including Canberra’s agreement to lift a 15% cap on foreign ownership. But, notes FT Alphaville, key regulators have signalled a favourable view of the tie-up. The WSJ has doubts, saying the deal is “not only an expensive proposition, it might not even work”. Meanwhile, reports Bloomberg, the deal has ignited bid speculation over other exchanges including HK and Malaysia. Read more
Singapore has taken its ambitious push to become Asia’s investment “gateway” to a whole new level, with a deal by SGX, the main Singapore exchange, to buy Australia’s ASX for A$8.4bn ($8.3bn).
Analysts see the deal as logical and timely, telling the FT that while both exchanges are profitable, neither can grow much beyond their domestic markets by staying independent. Lex meanwhile notes that the two are a ‘decent fit” — particularly as alternative trading venues steadily encroach on the business of the more traditional exchanges. Read more
Shares in SGX, the Singapore exchange, fell nearly 7 per cent after it unveiled an agreed US$8.2bn offer for Australia’s ASX – a deal that would create Asia’s second-largest exchange group, and the fifth largest in the world, reports the FT. ASX shares rose by as much as 25 per cent to A$43.89 on details of SGX’s bid, which values the Australian exchange at A$48 a share. Both bourses have struggled to compete with the rise of alternative platforms and new technology for trading. In particular, the combined SGX-ASX entity will be able to tackle the Australian arrival of electronic trading platform Chi-X in March 2011, and vie with Hong Kong as a global centre for initial public offerings, Bloomberg observes. Read more
SGX, the Singapore exchange, has offered A$8.4bn ($8.2bn) for Australia’s ASX in a deal that would create Asia’s second-largest exchange group, highlighting consolidation pressures amid the growth of electronic trading, reports the FT. Under the deal announced on Monday, SGX would buy the Australian exchange via a scheme of arrangement using a mix of cash and shares. It will pay A$22 cash and 3.473 new SGX shares for each ASX share, valuing the ASX at A$8.4bn or A$48 a share — a 37% premium to Friday’s closing price. ASX shares were in a trading halt on Monday. The pair are a “decent fit”, says Lex, and both fear the encroachment of alternative trading platforms. Read more
Breaking pre-market news on Friday,
- Betfair prices IPO toward the top end of the range; values business at almost £1.4bn — statement. Read more
The chief executive of the Australian Securities Exchange has criticised the Obama administration’s planned regulatory reforms of the US financial system, arguing they are “draconian” and out of touch with market developments. Robert Elstone, head of the ASX, told the FT that the US reforms were too broad, targeting parts of the securities markets, such as OTC swaps, that were not key contributors to the global financial crisis. Read more
The Australian Securities Exchange on Thursday refused to comment on speculation it was considering a bid for Iress Market Technologies, an Australian-listed market data and trading group in which it has built a 20% stake. Iress, which has a market value of close to A$1bn ($830m), last week said it could not explain a surge in its share price beyond bid rumours. ASX also reported a 14% drop in full-year pretax profits to A$445m in the year to June 30 on a 30% decline in the value of trading from the cash market. Read more
Chi-X, the equities trading platform that has quickly established a foothold in Europe, expects to start operating in Australia early next year and is negotiating to enter several other big Asia-Pacific markets. Tony Mackay, chief executive of Chi-X Global, told the FT he hoped to start operations in Australia in early 2009, subject to regulatory approval. Mackay claimed that, with poor market conditions, Australia’s big pension funds would benefit from the lower trading costs Chi-X could offer. Chi-X, which would be competing head-on with ASX, Australia’s incumbent stock exchange, is in exploratory talks with several Asian governments, including Japan, Hong Kong and Singapore. Nomura, of Japan, is Chi-X’s biggest shareholder. Separately, the FT reports that ASX is under fire from RiskMetrics, an influential corporate governance advisor that has raised concerns over the exchange’s performance as a market supervisor. Read more
The Australian Stock Exchange became the latest bourse to offer traders the chance to locate their computer servers next to an exchange’s matching engine to improve trade execution times. The ASX said Thursday it expected its “co-location hosting service” would start in the fourth quarter. The process enables traders to place their systems either right next to or a few metres away from an exchange’s data centre in order to shave microseconds off the time it takes to execute trades. The London Stock Exchange will start next month and four other so-called “multilateral trading facilities” – BATS Trading, Turquoise, Equiduct and a pan-European platform planned by Nasdaq OMX – plan the same. Read more
The Australian Securities Exchange will next month become the world’s first exchange to offer trading in “contracts for difference”, derivatives that have typically been used by investors such as hedge funds to gain exposure to shares without directly owning them. The move is part of the ASX’s effort to capture business from over-the-counter investors who trade CFDs, as well as creating a mechanism that will appeal to retail investors. Read more