atans1

S’pore Inc: SGX misread Oz

In S'pore Inc, Temasek on 20/03/2011 at 10:31 am

A A$7.3 billion ($7.1 billion) bid by the Singapore Exchange (SGXL.SI) to take over its Australian rival is faltering as the Australian government, the regulator and a key opposition party are all set to reject it, the Sydney Morning Herald said.  Reuters article

The SMH story is extremely credible was it was written by the paper’s chief political correspondent. 

This shows that SGX did not do its homework. Everyone who has a say in approving the bid seems against it. Reminder: the takeover needs the approval of the Foreign Investment Review Board, then the Treasurer (finance minister) and then Parliament (where the governing party does not a majority).

The only people in favour are the ASX board and the shareholders. They would wouldn’t they? The shareholders are being offered a huge premium.

SGX should cut its losses and move on. And sack is FT CEO who, I’ve been assured, is the moving force, behind the deal. It';s not the first time an FT CEO has messed up SGX. It had a previous FT CEO. But the in-between local-born CEO (now president at Temasek) doesn’t have a gd record too, S-Chips continued to be the primary source of new listings (numberswise) when he was CEO, even though evidence that there were problems with S-Chips was growing.

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  1. given its track record, especially the S-chip problems, i’ve thought that the SGX should have been sold by now. Seems like there’s no point keeping it, other than bragging rights. Maybe the links with the Thai, Malaysian and Philippines exchanges later in the year may help somewhat?

  2. [...] Life, the universe and everything – Thoughts of a Cynical Investor: S’pore Inc: SGX misread Oz [...]

  3. Having studied and lived in Australia for some time, my first reaction to the news of the merger was “it’s never going to happen”, based on my understanding of the Ozzie psyche…

    True enough, the opposition parties and even ordinary Oz citizens have come out to speak against the merger…mainly because they don’t want to lose a “national institution”…

    In fact, I have spoken to friends who have studied in Oz and they concur with me that those guys at SGX have no clue about the ground sentiment…

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