Australian bourse merger may not be popular but it would be sensible



The Australian government is close to a critical decision that will change the way the country's investors do business.

It will either give approval for the Australian Stock Exchange (ASX) to be taken over by the Singapore Exchange (SGX) and drag it into the world of supranational investment, or it will cave in to local interests that want to protect the exchange from foreign influence.

The chances of Singapore receiving the go-ahead are not good. It is now about politics as the deal has to be passed by an array of government bodies, and Singapore will have to convince too many people that the takeover is not detrimental to national interests.

The government of the prime minister Julia Gillard is highly unlikely to give its blessing and opposition parties are about to start a public campaign to block the takeover.

Pressure is mounting on the ASX, however. It considers itself to be a leader in mining and energy listings worldwide, but it will lose its supremacy with the merger of the London and Toronto exchanges, which will represent a total market capitalisation of US$5.87 billion (Dh21.56bn).

As the Australian investment manager Mark Nathan said this month, the merger almost has to go ahead if the Australian exchange is to compete globally.

"The Toronto-LSE tie-up only adds to the argument that you can't be an island in the global exchange landscape," Mr Nathan said. "It will certainly focus the minds of politicians."

It is not just about the LSE-Toronto deal. New York's Nasdaq OMX and Chicago's Intercontinental Exchange are the latest bourses considering a marriage, with the pair supposedly on the verge of a joint, hostile counter-bid for the New York Stock Exchange Euronext.

The NYSE Euronext has already agreed to a $10bn merger with the Deutsche Boerse.

The main argument for a merger between Australia and Singapore is that they need each other to create a super-exchange for greater economies of scale at a time when electronic exchanges are gaining market share.

But there are even more cogent arguments that demand a shake-up in Australia, one of which is that there is no diversification in the country's share market.

About a quarter of listed stocks in the main ASX 200 index account for 80 per cent of its capitalisation. Eleven stocks in the index account for half of the index and 20.3 per cent of the market is BHP, Rio, Newcrest and Woodside. The Big Four banks are 21.4 per cent and Woolworths, Wesfarmers and Telstra account for another 10 per cent.

If BHP doubled in price and the other 199 top stocks had an average return of zero, the market would still go up by 12 per cent. The index performance is not an average; it gives no reading of the combined state of listed corporations.

The problem with the ASX-SGX combination is that it is not a merger but a takeover, albeit an extremely sweet one for ASX shareholders.

SGX offered $8.4bn in cash and scrip for the ASX in October, pricing ASX shares at about $48 each - a 37 per cent premium to its value at the time.

The deal has been held up and the offer now stands at about $42 a share because of falling stock prices and fluctuating foreign exchange rates.

The deal is in both parties' interests. Singapore needs to strengthen its expertise in financial services while Australian institutional investors need a larger investment universe.

Australia now has a superannuation pool of about $1 trillion, which is expected to grow to $5tn by 2030. The biggest local companies receive most of this money but with Singapore running the show a decent-sized market for bonds, which is lacking in Australia, is likely to open.

Nobody likes the psychology of a takeover but the ASX risks being marginalised as the rest of the world takes advantage of increased liquidity and the corporate synergies of an international marriage.

When the bottom eventually drops out of the resources boom and China runs out of steam, there will be no prizes for guessing which exchange will be treated as the lesser spouse.

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Dates for the diary

To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:

  • September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
  • October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
  • October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
  • November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
  • December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
  • February 2, 2018 Bodytree will host its 4th annual yoga market.

1,000 Books to Read Before You Die: A Life-Changing List
James Mustich, Workman

The biog

Name: Mariam Ketait

Emirate: Dubai

Hobbies: I enjoy travelling, experiencing new things, painting, reading, flying, and the French language

Favourite quote: "Be the change you wish to see" - unknown

Favourite activity: Connecting with different cultures

LIVING IN...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

US PGA Championship in numbers

1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.

2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.

3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.

4 Louis Oosthuizen has now finished second in all four of the game's major championships.

5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.

6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.

7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.

8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.

9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.

10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.

11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.

12 Paul Casey was a combined 12 under par for his first round in this year's majors.

13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.

14 The world ranking of Justin Thomas before his victory.

15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.

16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.

17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.

18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).

if you go

The flights

Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.

The hotels

Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.

When to visit

March-May and September-November

Visas

Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.

The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Coal Black Mornings

Brett Anderson

Little Brown Book Group 

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now

If you go

The flights

Fly direct to London from the UAE with Etihad, Emirates, British Airways or Virgin Atlantic from about Dh2,500 return including taxes. 

The hotel

Rooms at the convenient and art-conscious Andaz London Liverpool Street cost from £167 (Dh800) per night including taxes.

The tour

The Shoreditch Street Art Tour costs from £15 (Dh73) per person for approximately three hours. 

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).


Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).


Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

Sources: Jayanti Maitra, www.adach.ae

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

TO CATCH A KILLER

Director: Damian Szifron

Stars: Shailene Woodley, Ben Mendelsohn, Ralph Ineson

Rating: 2/5

Rooney's club record

At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

SM Town Live is on Friday, April 6 at Autism Rocks Arena, Dubai. Tickets are Dh375 at www.platinumlist.net

QUARTER-FINAL

Wales 20-19 France

Wales: T: Wainwright, Moriarty. Cons: Biggar (2) Pens: Biggar 2

France: T: Vahaamahina, Ollivon, Vakatawa Cons: Ntamack (2)

Meg 2: The Trench

Director: Ben Wheatley
Stars: Jason Statham, Jing Wu, Cliff Curtis, Page Kennedy, Cliff Curtis, Melissanthi Mahut and Shuya Sophia Cai
Rating: 2/5