Tokyo: Japan’s top exchange will seek its own alliances if a planned multi-billion dollar merger of the Singapore and Sydney stock exchanges goes ahead, the bourse’s head said in a report Wednesday.
Atsushi Saito, chief executive of the Tokyo Stock Exchange, told the Financial Times that if SGX’s $8.2 billion offer for ASX went ahead, it would not be “a good story” for Tokyo.
“If Japan becomes isolated on the international stage — that is not good,” he said. “There are many options. There could be a combination of TSE and others on an international basis.”
Saito’s remarks illustrate how the proposed offer by Singapore’s SGX for ASX has ruffled the region.
“The consensus (among officials at Asian exchanges before the proposed deal was announced) was that such a thing would be impossible in Asia” due to the differences in culture and sense of values, Saito told the newspaper.
Saito added that if the deal were to go ahead, it could result in a loss for the TSE, which is SGX’s second largest shareholder with 4.9%, the Financial Times said.
“Our shareholdings will be diluted, with our stake falling to about 3.1%. It’s possible we’ll have a loss of hundreds of millions of yen,” he said. The proposed merger aims to create the world’s fifth biggest exchange with a market capitalisation of about $12.3 billion, although it first needs to pass regulators and a growing political backlash in Australia.
Analysts say sticking points may 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.