If Singapore Exchange Ltd.'s US$8.2 billion takeover bid for Australia's ASX Ltd. pushes through, the merged bourses could create a new hub for trading in Asia, reports the Wall Street Journal.
The merger would be the first between two exchanges in Asia-Pacific and create the region's first pan-regional stock exchange. But the combination is not good news for the Hong Kong Exchanges & Clearing Ltd. (HKEx) which has attracted the world's biggest initial public offerings this year, including the Agricultural Bank of China Ltd. IPO which raised US$12 billion in Hong Kong.
According to the Journal, a combined Singaporean and Australian exchange could threaten Hong Kong's position as the main entry for foreign stock investors into the China market.
The merged exchanges would offer longer trading hours and have the liquidity to attract large companies and major investors. To attract investors, SGX has aggressively embraced technologies, such as dark pools and high-frequency trading, adds the Journal.
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