Australia Approves ASX Acquisition by Singapore; Aussie Rebounds

Chandrasekhar Atreya
15 Dec, 2010
New York City

Stocks in Australia were flat and four large banks were in focus. Competition regulator approves Singapore Exchange

[R]6:00 PM Sydney, Australia – Stocks in Australia were flat and four large banks were in focus. Competition regulator approves Singapore Exchange’s takeover offer for ASX. The Australian dollar traded at parity with the U.S. dollar but settled lower.[/R]

The Australian stock market closed nearly flat today after BHP Billiton traded lower in the late trading.

The ASX 200 Index rose 0.02% or 0.90 to close at 4,767.80.

The Australian dollar traded higher after reaching parity with the U.S. dollar in overnight trade for the first time since November 12. Australian dollar traded between 99.45 U.S. cents and 100.29 U.S. cents, and closed at 99.45 U.S cents at Sydney today.

The competition regulator of Australia said it will not oppose the proposed $8.4 billion acquisition of ASX by Singapore Stock Exchange and said its focus was on whether the takeover would deter the entry of rival electronic market exchange operator Chi-X Australia.

“The ACCC found that the joint venture relationship between SGX and CXG (Chi-X Global) would not alter CXA’s incentives to establish a trading venue in Australia and noted that SGX has no economic interest in CXG,” ACCC Chairman Graeme Samuel said today.

Australian government cut its forecast for exports of wheat and coal for 2010-11 by A$3.8 billion, following the losses from the wet weather in the eastern states of the country.

Fletcher Building Ltd, New Zealand’s largest supplier of building products, agreed to acquire Crane Group of Australia for A$740 million in cash and stock to boost its business in Australia.

The offer values Crane’s shares at A$9.35 or 22% more than the closing price on Tuesday, according to a statement to the regulator by the Auckland-based company.

The global financial crisis led to a repricing of risks and changes in the structure of funding of banks in Australia by impacting the financial flows by slowing the credit growth, a central bank official said today.

“Having been underpriced for a number of years prior to 2007, risk was rapidly and substantially re-priced as the financial crisis unfolded,’ Assistant Governor Guy Debelle told the 23rd Australian Finance & Banking Conference in Sydney.

NSW government announced a reduction of more than A$600 million in the state’s budget for 2010-11 due to what it termed as volatility of GST revenues.

Releasing the half-yearly budget review today morning, NSW Treasurer Eric Roozendaal said the budget surplus for 2010/11 would be A$167 million, significantly less than the A$773 million forecast in June.

Stock Movers

BHP Billiton lost 30 cents to close at A$45.35 tracking the weakness of commodities prices in the Shanghai trading.

Among the four large banks all but Westpac dropped today.

National Australia Bank dropped 6 cents to A$24.45, ANZ fell 13 cents to A$23.82 and Commonwealth Bank lost 15 cents to close at A$50.50. Westpac Banking Corp rallied 7 cents to close at A$23.07.

Origin Energy surged 1.79% or 30 cents to A$17.10 after it confirmed payment of A$3.25 billion for the two retail assets of NSW government power distributors.

Among other energy stocks Woodside Petroleum dropped 8 cents to A$43.28 and Santos lost 9 cents A$12.61.