Australia’s dominant stock exchange is looking to boost its ties with its Singaporean counterpart at a time when markets are expecting more consolidation in the global exchange industry.
ASX Ltd. (ASX.AU) said in a statement on Wednesday that it and Singapore Exchange Ltd. (S68.SG) will host hubs belonging to each other in their own data centers from September with a view to increasing the flow of futures activity.
Currently around 6% of futures and options volume on the ASX 24 market is generated from the Australian exchange’s international hub network across the U.S., U.K. and Hong Kong as well as Singapore, but it is hoping to increase this number with the new deal.
“This is a new initiative that is part of our plan to internationalize the ASX,” said Deputy Chief Executive Peter Hiom in a statement.
Last week, the exchange dismissed reports that it was considering an $11.3 billion merger with the London Stock Exchange.
SGX has, however, this month signed a cross-quotation agreement with the LSE that will allow the largest and most actively traded stocks on each exchange to be traded by their respective member firms. SGX has also pushed for further tie-ups with other bourses in Southeast Asia through the Asean Exchanges alliance.
Commonwealth Bank of Australia analyst Ross Curran said ASX’s announcement signalled a push for “closer integration to the region which should keep the authorities relatively comfortable” but that it wasn’t the next step toward another merger attempt, as this was “well and truly rebuffed” a year ago.
“SGX is delighted to enable easier and more cost effective connectivity offerings at a time when investors are increasingly using exchange-traded derivatives to manage risks in the various global marketplaces,” said SGX President Muthukrishnan Ramaswami.
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