ASX offers resources expertise

ASX offers resources expertise

The Australian Stock Exchange (ASX) will be attending the Indonesia-Australia Business Council (IABC) Annual Conference in Bali from June 15 to June 17. It will be offering its services and the services of the Australian financial services industry more generally, to assist the development of Indonesia's mineral resources.

The ASX is a world leader in the value of resources stocks that it lists -- they represent nearly a third of its total market -- as well as a resources-specialized segment of the financial services industry and of associated areas such as legal and accounting services and has grown to support this concentration of companies.

The idea is that Australia's expertise in capital-raising for resources projects as well as tightly regulating the disclosure of information by resources companies, ideally complements the wealth of yet-to-be developed resources in Indonesia; at least until significant resources sectors develop on the Jakarta Stock Exchange and the Surabaya Stock Exchange.

The three exchanges are already developing a close relationship, having signed earlier this year memorandums of understanding on cooperation.

These agreements, and the ASX's interest in assisting the development of a resources sector in Indonesia's stock market, underline its belief that regional cooperation is the best way of dealing with the competitive threats from much larger economies posed by the globalization of financial markets.

The Australian stock market is one of the dozen largest national markets in the world, yet it represents less than 2 percent of the Morgan Stanley Capital International world stock market index. The whole Asia-Pacific region, excluding Japan, is less than 6 percent.

The ASX's Chairman, Maurice Newman, who is to attend the conference, makes the point that in such a situation, it is necessary to moderate the natural competition between stock markets in the region with a degree of cooperation. Perhaps leading, one day, to a "virtual market", providing mutual access between regional stock exchanges.