CANBERRA, Dec. 6 (Xinhua) -- Access Economics on Monday said the Singapore Stock Exchange's (SGX's) takeover of the Australian Securities Exchange (ASX) would benefit the Australian economy.
In an Australian Securities Exchange report released on Monday, Access Economics said the 8.4 billion U.S. dollars deal would improve Australia's chances of becoming a financial services hub in Asia and lower the cost of capital for Australian companies.
It said the merged group would build a conduit into Asian financial markets to improve financial flows between Australia and Asia, and connect Australian funds managers to "fast-growing pools of Asian savings".
It would also reduce the cost of capital by increasing access to foreign capital, liquidity and diversification.
"ASX-SGX is a natural fit for encouraging Asian capital to invest in Australia's economic potential," the report said.
The deal, one of the biggest proposed takeovers of the year, requires approval from Australia's Foreign Investment Approval Board and Treasurer Wayne Swan, who would assess whether the deal would better the country's prosperity.
Interestingly, the report also said the ASX should be allowed to respond to new competitors entering its markets, namely that of Chi-X, which is planning to launch next year.
"If ASX-SGX were disallowed, this could add to perceptions, especially in Asia, that Australia is not welcoming of foreign investment and/or is overly protectionist," it said, quoted by The Australian newspaper.
If approved, the merged group would become the fifth largest securities exchange in the world by market capitalization at about 12.3 billion U.S. dollars and become the second largest listings venue in Asia.
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