The Singapore exchange hopes its merger with the ASX will help cement its place as a leading Asian finance centre. Photo / Thinkstock
The Singapore exchange hopes its merger with the ASX will help cement its place as a leading Asian finance centre. Photo / Thinkstock
CANBERRA - The proposed A$8.4 billion merger between the Australian and Singapore stock exchanges could receive a rough ride in Canberra.
Treasurer Wayne Swan is holding his tongue, the Opposition is demanding he prove a merger is in the national interest and MPs on both sides see red warning lightsflashing.
Queensland independent Bob Katter has called the proposal "lunacy on a grand scale", although Greens MP Adam Bandt and the three independents whose votes keep Prime Minister Julia Gillard in power have not stated their position yet.
The proposed merger is a potential minefield for Gillard, who is already having problems in other major policy areas, and who has slipped behind the Coalition in the latest polls.
Commentators, shareholders and business leaders agree there could be benefits for Australia, including greater access to international markets and capital flows.
But there are also concerns that the merger could run counter to Australia's ambitions to become a regional financial centre, that the new entity would be dominated by Singapore, and that the Singapore Exchange - 23 per cent owned by the island's Government - could be swung by competing political priorities.
Australians have also shown broader concern over foreign investment, notably Chinese.
The Government will take time to determine its position, with Swan saying only that the proposal is a matter for those involved, the regulators, and is subject to a number of approvals.
Shadow Treasurer Joe Hockey told ABC radio yesterday that Swan needed to explain to Australians how it was in the national interest to have the ASX bought entirely by Singapore, the nation's major rival as a regional financial centre.
The merger will need the approval of the Australian Securities and Investments Commission, the Foreign Investment Review Board, and ultimately Swan. It will also need the support of Australia's hung Parliament.
The merger would require amendments to the Corporations Act requiring the votes of the Greens and independents in the Lower House and, until July, the Greens, Family First and independent senators in the Upper House. From July the balance of power in the Senate will be held by the Greens, who have concerns about the proposal.
