ASX, SGX merger plan faces opposition from Australian MPs

The proposed merger between the Australian Stock Exchange (ASX) and Singapore Exchange Ltd (SGX) has been under threat, after a wide range of Members of Parliament (MPs) in Australia on Tuesday expressed opposition to the deal.

ASX and SGX announced on Monday that they have entered into a 8. 4 billion Australian dollars (8.3 billion U.S. dollars) merger deal to create the premier international stock exchange in Asia Pacific.

The deal must not only be reviewed by several regulatory agencies, but will also need to be approved by the Federal Government and the finely balanced Australian Parliament.

Independent MP Bob Katter has been the first to flag his opposition to the merger, describing it as "lunacy on a grand scale". He expected other cross-benchers in the lower house to support his motion in parliament in the hope of blocking the takeover.

Both the opposition Liberal/National coalition and the Greens have also raised concerns about the merger, demanding the Australian Labor government to prove that the proposed takeover was in Australia's national interest.

Furthermore, Australian Competition and Consumer Commission (ACCC) on Tuesday warned it has "significant concerns' about the takeover.

Treasurer Wayne Swan has promised that regulatory process would ensure any decision respected Australia's national interest.

"The market integrity of the ASX will be preserved," Swan said in Canberra on Tuesday, adding that advice also would be sought from the Foreign Investment Review Board, the Australian Securities and Investments Commission, the Reserve Bank and the Australian Competition and Consumer Commission.

Meanwhile, Prime Minister Julia Gillard would not comment on the deal, but said that it was in Australia's interest to be an open economy.

"We are great trading nation, we make our living by making our way in a globally competitive world," Gillard told reporters in Canberra.

"An open economy has been in Australia's interest. Any international entity wanting to invest in our country, make a major investment, must be the subject of proper scrutiny and processes and they are."

ASX shares was trading at 39.48 dollars (38.8 U.S. dollars) by 1:27 pm (AEDT), after hitting high of almost 44 dollars (43 U.S. dollars) on Monday.

Source: Xinhua