Australia independent MP backs ASX-SGX deal

CANBERRA (Reuters) – A key independent Australian lawmaker on Friday backed the proposed Singapore Exchange (SGXL.SI: Quote, Profile, Research) $7.7 billion bid for the Australian exchange (ASX.AX: Quote, Profile, Research), and said Australia should not be afraid of foreign capital.

Several independents and the minority Greens party have expressed concerns about the ASX being foreign owned. The deal will need foreign investment approval from the government and then parliamentary support to go ahead.

The Singapore-ASX deal could make Australia a regional powerhouse, said independent Rob Oakeshott, who became the first local politician to publicly express broad support for the deal.

“We should not lose the fight to protectionism or xenophobia in this parliament,” Oakeshott, who is one of three independents who support Prime Minister Julia Gillard’s minority government, told the National Press Club on Friday.

The deal is, however, likely to face a bumpy ride in parliament.

“We should not, for example, be afraid of foreign capital, and this parliament should be urging government to open the doors to foreign capital and to encourage the jobs that come with this.”

Oakeshott said the Singapore Exchange and ASX should quickly make their application to the Foreign Investment Review Board, which will make a recommendation based on a public interest test.

Treasurer Wayne Swan will have the final decision, but any takeover would also need parliamentary approval. The main opposition parties said they would await Swan’s decision before announcing whether they would support or reject the deal.

Oakeshott said there were potential benefits from the Singapore-ASX deal.

“In a world where exchanges are partnering up to make regional powerhouses, combining the 10th biggest exchange with the 14th biggest exchange to make the fifth biggest exchange in the world does have upsides,” he said.

“And Singapore in particular has the fastest software platform in the world, which is already attracting capital from locations such as Hong Kong.

“We could, if it passes the public interest test, certainly make a regional powerhouse by joining together with our near neighbor, and we need to have open minds to the possibility that this is indeed in our sovereign interest to pursue.”

(Reporting by James Grubel; Editing by Ed Davies)