ASX chief executive Elmer Funke Kupper says merger and acquisition activity among global securities exchanges will escalate, as the Australian bourse deepens its strategic relationships in Asia.
Speaking at a Women in Banking and Finance event in Sydney yesterday, the ASX boss said there is an “inevitability” about consolidation of exchanges, while ruling out any firm plans for his organisation.
“Will exchanges ever get together again? The official line is ‘no comment’ and there is nothing to talk about,” Mr Kupper said.
“But exchanges will consolidate, it is happening again in the world and we will see this accelerate in the next few years.”
Reflecting on the ASX’s previous failed attempt to merge with the Singapore Stock Exchange – a plan he says lasted “all of about 24 hours” – Mr Kupper said that while it is likely the ASX will “do nothing” on the M&A front for a decade or more, Australia needs to follow the global trend closely and be prepared.
“We need to think about this intelligently,” he said, adding that the regulatory approach to such activity between global bourses will be an important factor.
More broadly, Mr Kupper – who was previously group managing director for ANZ’s Asian operations – said the ASX is optimistic about opportunities in the Asia-Pacific region, revealing ASX’s subsidiaries will be undertaking a major back-end revamp to allow for multi-currency capabilities, including Renminbi.
“We benefit immensely from being part of this region – we get a million futures contracts a month primarily from Hong Kong and China,” he said.
“We need to make sure that anyone who wants to trade in our market from our region can do so. The opportunities and the growth in Asia is far greater than it will be here.”
The comments come as the ASX announces a memorandum of understanding with the China Futures Association, which Mr Kupper said was proof the ASX is “deepening [its] relationships” in the region.
With the regulator and policymakers questioning whether to open up settlement and clearing to greater competition, Mr Kupper also said the ASX is very aware it cannot take its position for granted.
“Monopoly needs to be earned,” he said, listing staff and client engagement as the key tools for maintaining a healthy monopolistic position.
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