Australian Prime Minister Julia Gillard yesterday warned critics of the planned merger between Singapore and Australia’s stock exchanges against seeking to “disturb” long-standing foreign investment processes.
Gillard said she discussed the proposed US$8.2 billion takeover of the Australian Stock Exchange (ASX) with Singaporean Prime Minister Lee Hsien Loong (李顯龍) during talks at the ASEAN summit in Hanoi.
She said both understood the community interest in the bid which needs approval from both Australia and Singapore and aims to create the world’s fifth biggest exchange with a market capitalization of US$12.3 billion.
“We also both understood that there is a clear process to be gone through here, a clear process from the Australian point of view with our Foreign Investment Review Board and that that process would be gone through,” Gillard told ABC television.
The proposed merging of the Sydney and Singapore stock exchanges faces political opposition in Australia, where Gillard heads a fragile minority government which relies on the Greens and independents to hold power.
Gillard said it would be inappropriate for her to speculate on whether the merger would be approved by the foreign investment watchdog, an important step in it being given the green light, and called for due process to be respected.
“I certainly hope that no one would seek to criticise or disturb what have been long-standing and bipartisan arrangements to assessing foreign investment and assessing it through the prism of our national interest,” she said. “That’s what the Foreign Investment Review Board does — ask the question: is this in Australia’s national interest?”
The Singapore-Sydney tie-up, which will also need the approval of Australia’s parliament to go ahead, has been strongly criticized by Greens leader Bob Brown who said he would oppose it because of the city state’s “appalling” rights record.
Singapore Exchange chief Magnus Bocker has said the merger will be good for Australia by allowing investors from all over the world to invest in the country’s resources boom.
However, potential sticking points could include the Singapore government’s large stake in the SGX, which could raise sovereign ownership concerns, and the board’s composition with 11 Singapore representatives and four from Australia.