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SYDNEY - Australian Securities Exchange Ltd (ASX) says it is positioned to take part in the global trend toward exchange consolidations if it chooses.
Chairman Maurice Newman said the exchange is in a strong position, following the merger of Australian Stock Exchange Ltd and Sydney Futures Exchange
Ltd last year.
"One of the benefits of the ASX/SFE merger, is the strength it has given us to remain relevant in this rapidly changing world," he told shareholders at the company's annual general meeting (AGM).
"This includes positioning ASX to play a meaningful part, if we so choose, in the global trend towards exchange consolidations.
"There's been no slackening in the pace of global consolidations, or alignments as they're often called, since we discussed the topic at last year's AGM."
Mr Newman pointed to the mergers of the Chicago Mercantile Exchange and Chicago Board of Trade, the New York Stock Exchange and Euronext and the London Stock Exchange and the Borsa Italiana.
"One of the more interesting developments in recent months has been the emergence of state-owned entities from the Arabian Gulf as serious players in exchange alignment," Mr Newman said.
"These moves are part of a jostling among the Gulf states for supremacy as that regions dominant financial centre and indicate how financial power in the world is changing."
For Australia, all this activity had underscored the "good sense" of the past merger of the six state-based exchanges into a national exchange.
"Many jurisdictions today, with multiple domestic exchanges, are scampering to catch up to the position we already find ourselves in," Mr Newman said.
"It also demonstrates that competition is set to intensify at a global level."
Mr Newman also rejected claims that the ASX is a protected monopoly.
"Already, around 30 per cent of the value of the Australian equity market is owned by international institutions," he said.
"Lest we think only institutional investors think globally, the latest ASX share ownership study found that the proportion of retail investors owning shares listed on an overseas exchange has leapt from seven per cent in 2002 to 19 per cent in 2006.
"These developments refute claims that ASX is a protected monopoly."
ASX managing director and chief executive Robert Elstone said global financial markets had been volatile since the end of the financial year, and the local bourse had been stood up well.
"Financial market volatility since 30 June this year has tested the robustness of our risk management systems and processes, which have stood up very well," Mr Elstone said.
"The board and executive management look forward to continuing to deliver you strong performance for fiscal 2008 and beyond, and to remain pivotal to Australia's financial economy over coming years."
- AAP
