Tuesday, October 26, 2010

SGX takeover of ASX faces political opposition...

SGX offer to buy ASX for S$10.7B looks like a good financial deal for the Australians. SGX is paying a huge premium of 37% above the price based on AGX's current stock market valuation. This reminds me of SingTel takeover of Optus which proved to be drag on its performance for many years. The new CEO of SGX perhaps feels pressured to impress with a big move given his other ideas like getting rid of the lunch time, high frequency trading and introduction of black pools have not been well received. The previous SGX CEO brought in many (sometimes crappy) Chinese companies known as S-shares which was great for SGX and its stakeholders i.e. brokerages but sometimes painful for small shareholders of S-chips. Singapore companies have had a number of major takeovers of foreign counterparts more often than not the outcomes are not positive especially so when Singapore companies overpay - what comes to mind are Shin Corp, Americal President Line (by NOL) etc.

The ASX deal is opposed by Australian politicians who view the Singapore political system negatively:
.
"Singapore is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse," -Greens leader Bob Brown told Dow Jones [Link]
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“(They) don't respect this nation in the way they should, they don't respect our aspiration for a more democratic and fair society, and have a poor track record in regarding Australians as equals." - Green leader Bob Brown
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"I have a desire some things in my country are left owned by my country. I do not wish to live in a country of serfs working for foreign landlords," - Independent lawmaker Bob Katter [Link]
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I think the deal is likely to be derailed given ASX is an Australian monopoly and it is clearly against their national interest to have it under the control of foreign company. Singapore political system is viewed as unacceptable by certain Australians politicians and they cringe at the thought of Singapore companies coming in to dominate various business sectors because of PAP's lack of respect of human rights and undemocratic ways. Bob Katter worries that such invasions by "foreign landlords" will result in a country of serfs working for foreigners. In Singapore we get to hear PAP's explanation that foreigners will create jobs for locals and there is nobody as powerful as Bob Katter around to warn us that we might turn into serfs in our own country and stop that from happening.

27 comments:

Anonymous said...

This is why old man and son are being very stupid to continue the persecution of opposition and play dirty like they have done all this while. Every time they oppress political opponents the news go out overseas and more "soft" damage is done. And the greater likelihood these GLCs will overpay in overseas acquisitions.

Anonymous said...

ASX monopoly position would be no more shortly. Regulatory role was taken off ASX recently. Aussies are pragmatic. The takeover may go ahead with conditions and these add to the premium.

PM and MM would still be booed when they visit Australia.

ASX would be managed in the Australian way, not following Singapore's employment practices.

This takeover would only highlight the negatives in Singapore........

I think this is good. Perceptions, image, reputations are important. The real Singapore would be exposed for all to see......

BABO

Anonymous said...

I remember there is a law on profit making in Australia cannot be transfer out of the country but only can investment in Australia. China company bought Australia company also face the same problem. So I wonder what's the agenda behind SGX.

Anonymous said...

A safe place for many "someones" to run to...

A new place to suck more "blood" monies to up-keep their parasitical "blood-soaked" life-styles...

Maybe...could be...perhaps...

well your final assessment/guess is as good as mine liao.

Foolish as a past pommy over-rated uppity mindset.

Anonymous said...

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Anonymous said...

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Anonymous said...

didn't we, i mean, Temasek, lose money on Australia's ABC Learning?

and yes, also the problems as a result from Optus-Singtel?

didnt we learn anything from it?

aiyah - just buy Aus bonds/dollars lah..dont have to buy their companies if they dont like it.

Anonymous said...

I was touring in Queensland just recently. You will be surprised that a local aussie taxi driver actually accused Bob Katter being a racist. And just an added info, this nice taxi driver has the same race as Bob Katter. And also, one of the reforms by the greens (leader:Bob Brown) is to legislate euthanasia. Based on the above info, how will Singaporeans react?

In my opinion, taking away the political differences, the merger does reap benefits and both countries stand to gain from it. This is in terms of staying relevant internationally.

While it may seem to highlight the negatives of Singapore, you will be pleasantly surprised that many Aussies are in awe of Singapore. I found out drinking in the pubs. And the one common thing both AUS and SG have is the disdain for our governments.

sgcynic said...

Compared to Australia, Singapore is THE place to do business. We'll sell even our power stations to foreign buyers, never mind that they are considered strategic assets by other countries. No questions asked. Heck, if needs be our Parliament can be relied on to facilitate any deal...

Anonymous said...

Maybe the extra $$ given to acquire ASX will become kickbacks to some people, and I think they are Singaporeans?

Anonymous said...

I think second son in hiding in Oz needs a job.

sincity has kangaroos said...

Lucky,
I hope the Aussie politicians have a sense of humour and actually say to the Sin govt,
"before we discuss further, can we first do an independent survey with Singaporeans whether it is safe to trust their govt",

"whether it is more prudent for Aussies to wait til some political party other than the PAP forms the govt in Singapore."

Anonymous said...

Oh, 30 yrs ago, LKY commented that "Aussies are white trash of Asia", and these words are now coming back to bite us in the you-know-where.

geelo said...

Whatever the final outcome is, at least the issue is getting a fair hearing in the local MSM. Every man and his dog who has an opinion gets to air his view. In a genuine democracy, opposing views can be raised and debated upon. At the end of the day, whether the acquisition is accepted or otherwise, it is a democratic decision. The will of the people. Very different from how we do it in Singapore.

Anonymous said...

Does the wealth made by Singapore(the State) from oversea(foreign) investments benefit the locals ?
If not, how does it matter to Singaporeans ?

SG->AU Migrant said...

3 big cheers to Bob Brown for voicing out loud. But he has to make sure he doesn't step foot on SG in case he gets arrested for libel suit. :)

Anonymous said...

Whats in it for me??
(WIIMF)

Will it make my life less miserable?
Will it give me a better future?
Will it allow me to grow?
Will it help me understand?

It is none of my concern.

Anonymous said...

From locals suffering from policies, all the bloggers seemed to shift to state investments overseas which benefit no local. Worse, the discussions delved into other sovereign nation's governance. Here, the people, especially the social-political bloggers, and the parliamentarians seem at odd and are not able to come to terms, yet sinkapooreans are now venturing into the politics of foreign nations.
LOL.

Anonymous said...

some folks commented that the acquisition does not concern or affect them. on the contrary i think it does. it is likely to be another failed foreign venture and they will increase public transportation fares, erp, gst and other indirect taxes to cover losses

Alan Wong said...

"So I wonder what's the agenda behind SGX."

I would also wonder why would SGX pay such a high premium for owning such a small stake ?

I would be concerned if the real agenda is meant to benefit the vested interests of certain individuals or parties in high public places in return for some other favours as many people says that corruption can come disguised in different forms, albeit legally.

Another way of looking at it would be to ask Singapore a similar question of whether it would ever allow any foreign interests to own a similar stake in our strategic assets if there are no other strings attached ?

If not, then why are you so keen in having a piece of other people's cake ?

Ghost said...

Actually its understable why Australia is a little worried abuot the deal. The advantage for Singapore is obvious, the advantage for Australia...is far less so. Still as a Singaporean, I hope the deal go through

Anonymous said...

Are all Sinnerporeans the same?
That is they are always greedy and cunning?

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