Merger failure no big deal for ASX

By BINA BROWN Australia correspondent

Yesterday's announcement that the transtasman stock exchange merger was off has ended a five-year courtship.

ASX managing director Richard Humphrey and ASX chairman Maurice Newman flew to New Zealand last week to meet members of the NZSE board, who had been given a model of how a merged entity might look.

With several projects under way, the ASX has made it clear that it was looking for a firm commitment to the merger, most recently suggested by NZSE last August.

The ASX has seen little evidence of progress towards a merger at the New Zealand end or that the idea was being sold positively to its members.

It is understood a major stumbling block was the need to demutualise the NZSE before merging, and that this was receiving greater priority than any transtasman merger.

The ASX demutualised and listed in late 1998.

A combined ASX/NZSE was never going to be straightforward - the two currencies and separate trading and settlement systems were other points of contention.

The ASX put forward a model it believed would be earnings-per-share positive for ASX but one which clearly did not sit well with the NZSE.

Analysts saw the decision as a disappointment overall, but said it would have little impact on the ASX, which was now home to an increasing number of New Zealand companies through mergers or takeovers.