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Singapore And Australian Stock Exchanges Announce Plans To Merge

Fuseworks Media
Fuseworks Media
Singapore And Australian Stock Exchanges Announce Plans To Merge

The merger between the Australian stock exchange (ASX) and the Singapore stock exchange (SGX) will see the SGX buy all of the shares in the ASX, paying A$22 cash and 3.473 new SGX shares for each ASX share.

The large and liquid new market will not only be attractive for companies looking for capital but also strengthen Singapore as a global hub for wealth management.

The combination of the SGX and ASX will provide investors with a single point of access to over 2,700 listed companies from more than 20 countries, as well as the world's second largest grouping of resources stocks.

By market value, the combined exchange will be the second biggest in the Asia-Pacific region after Hong Kong and the world's fourth largest.

According to the ASX, it will have the world's widest range of the Asia-Pacific equity, fixed income and commodity derivatives, with over 400 contracts from more than 10 countries, including Australia, Greater China, India and Japan, and cover a wide range of commodities.

While an obvious win for shareholders of the ASX, traders and those companies looking to bring their company to market for additional capital, the deal also significantly boosts Singapore as a global financial capital, particularly in the area of wealth management for both onshore and offshore clients.

In Datamonitor's 2010 survey of offshore banks, it was found that offshore clients are expected to increasingly seek out direct equity investments over the next two years and that 63% of banks believe that offering such investment opportunities will be the best way to attract additional clients.

Indeed, a number of private banks catering to the offshore market in Singapore already offer their clients accounts with integrated brokerage services for the SGX and some US stock markets.

The SGX is set to grow in size to a $1.9 trillion market, with a wider range of companies, products and geographies, and Singapore's attractiveness as an offshore finance hub will similarly expand.

Indeed, as a more attractive market for companies to raise money in, it should be able to generate even more investment opportunities for offshore investors, another key draw uncovered by the survey, and so see the city state pull ahead as a global leader in wealth management.

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