10/25/2010

Red Dot buying over Australia

This is perhaps the biggest taking over in history. A tiny Red Dot buying over Australia...well almost. SGX is buying over the Australian Stock Exchange and paying cash! All $8.2b to take over the Australian Exchange. What is $8.2b? This is chicken feed knowing the war chest in our hands. This is only the beginning. Next destination, New York Stock Exchange. Let's buy over all the major Exchanges around the world. I will consider this a major strategic move, like the buying over of some of the biggest banks a couple of years ago. Just make sure this time round the exchanges are not rotten apples like the banks, that were infallible but fell like coconuts. If the homework is done properly, and no cans of worms, this is a giant step forward for a little Red Dot. And it is good to think big. I have always been advocating the buying over of the whole of Australia, starting with North Western Australia, the nearest state to home. We are making a difference, eh. Matilah, you can't run away from little Red Dot. We will call Australia the Red Continent! And you can call yourself Singaporean once more. : )

19 comments:

Anonymous said...

It will be nice if they buy over some Riau Islands or even Penggerang(Malaysia) and sell them at a profit to citizens who prefer to live out country.

Matilah_Singapura said...

redbean, it has never been my intention to "run away" from the red dot.

I think you read into it what you make up in your fertile but often-wrong imagination: I absolutely love Hotel Singapore. I am her biggest fan. Hotel Singapore has helped me create enough "happiness" for me to live as a beach bum in a high-tax western democratic welfare state.

Also I favour open borders where capital, labour, ideas and ownership of assets can be flow in and out with the minimum of fuss -- unfortunately we're not there yet.

I support the idea of "foreign" ownership. People's anuses go into spasms on the idea of "foreign" ownership. S'poreans vomit in fear at the thought of "foreigners" owning their precious real estate.

Not me. Being the unapologetic capitalist I am, foreign ownership offers THE BEST chance for the EFFICIENT use of (scarce resource) CAPITAL i.e. capital is allowed to "go" (with relative ease) to anywhere where the owners of that capital think they can get THE BEST ROI (Return On Investment).

I have long been a supporter of both the ASX and the SGX -- they are both excellent bourses, well run, well marketed, superb service.

I fully support the merger. Privatised bourses are in the world of (relatively) free market competition. Consolidating 2 small bourses makes a lot of financial sense -- since this move could also IMPROVE the efficiency of capital (i.e. more bang for the owner's buck).

Of course now you'll get all the Aussie idiots who are more emotionally nationalistic than economically literate:

"Oh the Asians are buying us up! Oh the yellow peril! Oh our civilisation and culture is being threatened! Oh Singapore is a totalitarian state: we now have our assets and our countries finances controlled by a foreign govt"

Always entertaining -- as far as human stupidity always is.

The M & A has my full support. Hopefully that idiot Gillard and her Marxsst buddies won't screw this up (you can bet they'll try)

Wally Buffet said...

Now the bets are getting bigger.

Seems like we are putting everything we have on "BIG".

After the deal is done, I will be biting my fingers and have nervous facial twitches hoping that when the market crashes in two, at most three years time, we can still get back some of the A$8.4b invested.

When we consumate the deal, we'll probably pay S$1.33 Sing to A$1 so that makes the deal S$11.17b. My little pecker tells me that buying Aussie resources at a time when the A$ is the best outperforming currency at the moment isn't what one would call a Midas touch strategy.

Hope I am wrong.

Hehe.

Matilah_Singapura said...

Wally:

> buying Aussie resources at a time when the A$ is the best outperforming currency at the moment isn't what one would call a Midas touch strategy. <

Sure, it may seem counter-intuitive. However unless China/ India stopped their economies cold and dead, Aussies resources (of which a bulk is mining, oil & gas, and agri-buisness) are likely to remain booming for decades yet.

So even if you buy "high" it really isn't whether the PRICE of the asset will appreciate or not... it is the CASH FLOW from the businesses which ultimately determine your sustainable wealth and thus satisfy your animalistic, capitalist lust.

I have never been a "trader" -- I do not like wildly fluctuating or appreciating asset prices. I am strictly a CASH FLOW guy: as long as my asset is generating cash, I'm happy. I couldn't care less about the "market value/ price".

Matilah_Singapura said...

The first salvos have been fired:

S'pore Lee-dynasty kena slap. Aussie govt kena ball-kicked:

Sydney, you're fucked!

Wally Buffet said...

Matilah,

The boom in Australia and other "commodity" economies is predicated on the continued economic expansion of China and to a lesser extent currently on India, the two perceived world "engines" of growth.

I don't know much of India but I do visit China very regularly and the reality away from the media hype is that save for infrastructure activities which will enjoy a lapsing effect, there will be a property bubble bust in the not too distant future,not decades. Visit any big first tier Chinese cities and you will see that quite a lot of the properties are not really occupied. Most were bought by speculators.

So I do not concur that Aussie resources boom can keep the current momentum once the peak is reached.

All it needs is a combination of spontaneous adverse economic factors to trigger a colossal downturn and the current currency war although pacified somewhat by the G20 meeting is the first bullet fired.

Hehe.

Wally Buffet said...

Mr. Pascoe is being too complimentary on Singapore.

Just ask Mr. Bean on the kind of "buzz" on the local stock exchange.

I am sure we were held in similar esteem when we made waves and bought big chunks of UBS, Citibank and other "sacred" western household names.

Chua Chin Leng aka redbean said...

This is a win win situation for both Australia and Singapore if it works out. With our dynamism and supertalents and Australia's land mass and natural resources, we could strike a mutually beneficial economic union and create a buzz that is exponential.

Australians should not whine about being the backyard of Singapore. Look at the benefits and opportunities, dual citizenship, economic freedom to live in either country without restrictions. Our culture and language are quite similar, ex British colony, British system, education etc etc.

Let's go for it mate. Australia here we come. We too like to call Australia home. : )

Anonymous said...

Bad news.
Sell SGX.
We will never able to manage an ang mo company. History repeats itself again and again.
In addition, SGX has never operated in a non-monopolistic enevironment.
Finally, we will end up probably paying too much like other deals before.

Chua Chin Leng aka redbean said...

Too late. SGX down 50c already.

But we have had great experience with Optus and SPAusnet. We can always pay foreign talents to run them. Money will solve everything.

Chua Chin Leng aka redbean said...

When I heard that Europe's Chi-X Australia will be operating another stock exchange to compete with ASX, I suddenly don't feel too good about the whole deal. Of course our deal maker will believe that they could beat the competitors fair and square. Hopefully they play fair and square and we will not be taken for a ride.

Matilah_Singapura said...

redbean: capitalism is a hard-played, fast-paced game. The M & A of the SGX and ASX makes it the 5th largest in the world, so I think they've factored in the idea that competition in markets (i.e. amongst bourses) is going to be robust.

Afterall, this is a fast money, big money game. You don't expect players here to have "tidak apa" "pan-chan" attitudes.

I don't think there' much to concern; IMO both the ASX and SGX are superbly managed. I'm not aware of the marketing the SGX does, but the ASX are fierce marketers, and back up their good name with excellent services and culture.

Wally: yes, there are many "threats" which can railroad the "commodity" economies of Oz, Canada, Brazil etc. However you can make Type 1 error (false positive) by just looking at China's cooled-down real estate: it had to happen -- they were printing too much yuan and have too low reserve ratios at their banks. Of course that will eventually lead to an over-production of real estate developments.

Asset bubbles are always credit/ money expansion driven, and at least China is smart enough to rein in the 'stimulus' even if that does mean some developers are going to go bust.

However China looks to the future: they are buying up resources with their enormous surpluses for the future.

It is actually China's obscenely HUGE surpluses and financial reserves that are keeping the commodity economies going even when the ret of the world (China's customers) like the hi-tax welfare states of the EU, UK and the USA are getting a much-needed, well-deserved lesson in Hayekian economics.

So I remain (cautiously) bullish on the commodity economies. Die-die China will continue to stockpile for the future. Something REALLY BAD has to happen to China DIRECTLY for them to pull back to a point where Aussie mines collapse.

China, and not-fr-behind India have HARD FILTHY SEXY CASH, which means the call the shots in the game of capitalism. "No money, no talk."

Matilah_Singapura said...

As predicted... the shit/ entertainment is about to start.

Here come the party-busters... the one and only... perenially UNINVITED GUEST to the party where everyone is minding their own business and enjoying themselves...ladies and gentlemen of the blog-o-nets:

Let's give a nice 2 finger salute to...

The Government

Wally Buffet said...

Hehe,

Buyers of ASX shares kenna fucked if the deal is derailed.

I think it will.

Hands were shaken too early.

SGX oversold.

Buying ASX ain't like buying Optus lah.

By the way, why can't we buy political parties like billionaire remisier want to buy and telco mogul bought, football clubs?

Matilah_Singapura said...

Who says you can't buy political parties? You can't get caught buying political parties, but that's another story.

If there's a market demand for something, it is only a matter of time before sellers (profit-seekers) appear.

That's the "magic" of our species -- if there wasn't profit-seeking going on, we'd be extinct a long time ago.

Matilah_Singapura said...

Tiu lay lo mo Singapore!

Never come between a cantonese and his money.

Anonymous said...

All not so is simple, as it seems

Matilah_Singapura said...

Because of the existence of arbitrary constructs like "The State" and the collection of people, resources and "laws" which run it -- The Government, you can rest assured that any voluntary activity/ enterprise will eventually attract the "unwelcome third party" to the one-on-one deal and FUCK IT UP

If you got rid of the state and the government, you will get rid of the problems of altogether. It doesn't mean you won't have problems -- but you won't have an unwelcome 3rd party FORCING ITSELF TO SOLVE YOUR PROBLEMS in their way and ONLY their way.

That is the reason I am unreservedly and unapologetically an Anarcho-Capitalist when it comes to political philosophy.

Matilah_Singapura said...

It gets worse. Apparently no one in parliament favours the SGX-ASX merger.

And as predicted, Singapore's "human rights record" was mentioned.

Also they don't like the fact that (apparently) 25% of the SGX is owned by the government (state)

This is looking like a classic textbook case of "doing business in a country where collectivist ideas trump individual benefits".

The most amazing thing about private enterprise held hostage by "demoCRAZY" this usual "wayang" -- everyone who is NOT INVOLVED IN THE DEAL, or have not even $1 of interest wants some "benefit" before they give "their approval".

Without the mob-rule called demoCRAZY, people who are not involved don't matter and neither do their 2-cent opinions -- put money down -- where your mouth is, or STFU.

Anyway, read on

The small amount of respect I had for Joe Hockey and Tony Abbot is ow gone. I've long suspected independent Bob Katter to be a closet socialist, and to me he is just one big penis-head in a 10-gallon hat.

Fuck all of them. And all the people who voted at the last election.