Australia rejects Singapore's bid for stock exchange
The Australian government has blocked Singapore's takeover bid for its bourse because it says the deal is contrary to national interest.
The Singapore stock exchange (SGX) made a $8.3bn (£5.1bn) bid for the ASX, the firm that owns the Australian stock exchange, in October.
Australian Treasurer, Wayne Swan had said earlier this week that he had serious concerns about the proposal.
SGX has terminated its bid after the rejection.
There are worries in Australia that the deal would have diminished the country's economic sovereignty and made it the junior partner in the deal.
"It's not the right deal for Australia if we want to enhance our links into global capital markets," said Mr Swan told reporters on Friday, three days after Australia's Foreign Investment Review Board advised the government to reject the deal.
"It's not the right deal for Australia if we want to grow our role as a financial services hub in Asia," he added.
Mr Swan has veto power on major foreign investments into Australia.
'Strategic growth'The merger would have created one of Asia's leading stock markets.
While its attempt to create that has fallen through, Singapore stock exchange said that it will keep a lookout for growth opportunities.
"As Asia's most international exchange, we will continue to pursue organic as well as other strategic growth opportunities, including further dialogue with ASX on other forms of cooperation," the exchange said in a statement.
Future cooperation between Singapore's bourse and ASX has not been ruled outThe markets also seem to be confident of SGX's position despite the current setback.
Its shares were trading 2% higher after the news about the failed bid.
Analysts say that the Singapore exchange may start looking at other ways to consolidate its operations.
"The SGX management would continue to look for other growth initiatives which could come in the form of cooperation on other levels with ASX, set up more cross-listing platforms with other exchanges or attract a deeper pool of regional companies to list in Singapore," said James Koh of Kim Eng Securities in Singapore.
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