By Michael Evans
THE nation's monopoly sharemarket operator, the Australian Securities Exchange, is back in talks with its offshore rivals and in the crosshairs of its Singaporean counterpart in what may create a $14 billion regional stock trading hub.
Faced with the threat of foreign competition for the first time and effectively rudderless after its chief executive, Robert Elstone, announced his resignation this month, the ASX and Singapore exchanges halted trade in their shares yesterday following a jump in the Australian bourse's share price amid speculation of a merger.
''A party has recently reactivated confidential discussions with ASX concerning a possible business combination,'' a statement from the Australian exchange said.
It added that it had observed a rise in its share price but did not yet have anything to disclose.
The Singapore Exchange halted trade in its shares within minutes of the ASX statement, ''pending an announcement''.
Sources did not rule out the possibility of a takeover offer should agreement on merger terms not be reached.
The upper hand appears to be with Singapore, amid reports it will provide the chairman and chief executive of the merged group.
The larger Singapore exchange is valued at $S10.2 billion ($8 billion), compared with the ASX's market value of more than $6 billion.
Market speculation of a tie-up in recent months has centred on Singapore, given its geographic and timezone similarities as well as both operating similar integrated business models.
The ASX was recently forced to acknowledge it was holding discussions with rival stock exchanges about potential mergers following a surge in its share price. And at this month's annual meeting, its Mr Elstone announced he would be stepping down.
After a slump in its share price this year, the ASX has surged to six-month highs amid ongoing speculation of a tie-up with an offshore partner.
The local bourse faces a significant competitive threat with the government poised to allow foreign competitors to operate share exchanges in Australia.
Analysts have said potential partners could also include the New York Stock Exchange, Hong Kong's exchange, the Chicago Mercantile Exchange and Deutsche Borse.
In the face of a challenge to its monopoly operations, the ASX has repeatedly warned of threats to the integrity of Australian markets should foreign competition be allowed into the country.
ASX shares jumped 86¢ to up $34.96 before trade was halted.