Singapore, Australian Stock Exchanges in merger talks

Two of the major stock exchanges in the Asia-Pacific region, the Singapore Exchange Limited (SGX) and the Australian Securities Exchange Limited (ASX), are reported to be in merger talks, which if successful, would create one of the region's largest bourses with a market value of approximately $14 billion.

It is expected that SGX would make a full takeover bid for ASX on Monday, The Australian reported. Both the stock exchanges went into a trading halt yesterday.

In a communication to the nation's securities regulator Australian Securities and Investment Commission (ASIC), Amanda Harkness, group general counsel and company secretary of ASX requested a 2-day trading halt on its securities.

ASX further stated that the company does not have any information to disclose at this time, but observed an increase in its share price Friday.

ASX shares ended up 86 cents, at A$34.96 yesterday, registering an increase of 2.5 per cent.

''A party has recently re-activated confidential discussion with ASX concerning a possible business combination. ASX believes that the discussions remain confidential but in light of potential for speculation is concerned to manage its disclosure obligations,'' the statement said.
 
On comparison, SGX is larger with a market value of around $8 billion, while ASX has a value of approximately $6 billion. The Singapore exchange is trading at an earnings multiple of 27 times against the Australian counterpart's 17 times.