The chief executive of the Australian Securities Exchange (ASX) Robert Elstone has come out in support of a proposed merger between his exchange and the Singapore Exchange, saying the merger would help Australia’s integration into the Asian economy and marginalize it if “parochialism” sank the deal.

Singapore made a US$8.3 billion dollar offer to the ASX back in October, but the plan ran almost instantly into opposition from some members of parliament. A loss of Australian sovereignty and differences in values with Singapore were given as reasons. Any merger deal would need to be approved by Australia’s securities and competition watchdogs, the Treasurer, and parliament itself — where the current minority government holds a loose one-seat majority. Any major changes to the deal would need to be re-approved by Singapore.

Elstone said Australia was “indebted’ to the industrializing nations of Asia, many of which are the country’s biggest trading partners. The region’s (particularly China’s) insatiable demand for natural resource exports is seen as a key contributor to Australia’s current economic health. A merger would represent a “natural progression in the competitive regulatory evolution of Australia’s capital market,” he said. A merger would increase the size, liquidity pool and product diversification. It would also lead to a larger percentage of funds from foreign sources flowing through Australia, currently quite low compared to important financial centers.

source & articles: AFP via Yahoo! and The Australian