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Financial markets damage contained: ASX

Eric Johnston
September 24, 2008

Outgoing Australian Securities Exchange chairman Morris Newman says opening up the market operator to domestic competition "is not in the national interest''.

Mr Newman who intends to retire at the end of today's annual meeting says the damage inflicted by volatility in global financial markets has largely been contained in Australia.

As the Federal Government considers whether to allow competitors into the key institutional crossings market, Mr Newman said this would fragment the Australian market and do little to increase competition.

He also said the ASX was best placed to be a market supervisor as opposed to the Australian Securities and Investments Commission taking the powers.

"ASX has never been opposed to competition, but we believe that it is appropriate for us to show concern about apparently informed comments which talk about a re-architecture of the supervisory arrangements of our market,'' Mr Newman said.

"The intellectual capital and the best vantage point for market supervision lie within ASX itself and, the more this is changed, the more it may weaken our markets, and be to the detriment of end users,'' he said.

"Given the Government's financial services hub aspiration, in my view, this is not in the national interest''.

Despite the severe market turbulence in recent months, Mr Newman said the ASX's underlying corporate performance has remained strong.

"Recent volumes have been extraordinary. Last week we handled nearly 800,000 trades in a day, 20% higher than the previous daily record,'' he said.

Meanwhile, independent director Russell Aboud received a mild protest vote, but institutions endorsed the re-election of Mr Aboud.

Combined with open proxy votes, Mr Aboud has received 90.3% of outstanding proxies.

However, this was less than second director Trevor Rowe, who was also up for re-election but received 97.4% of proxies.

The election is open to a final shareholder vote.

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