An Alliance To Weather The Sfe Storm
The Age
Friday July 30, 1999
The alliance formed this week between Dow Jones Indexes and the Sydney Futures Exchange would not be jeopardised by the takeover turmoil surrounding the SFE, the head of the United States financial giant said yesterday.
Dow Jones' managing director, Mr Michael Petronella, said he was unconcerned that the SFE was the target of two bidders, Computershare and the Australian Stock Exchange.
``Our relationship is primarily with the SFE and we are very confident that whatever happens to the exchange they will have our best interests in mind and act on our best behalf," Mr Petronella said.
Dow Jones, publisher of The Wall Street Journal, announced on Tuesday that its Asia Pacific Extra Liquid Series (AP/ELS) would list on the SFE, making it one of the first financial products to be launched on the futures exchange's new 24-hour electronic trading platform, SYCOM IV.
``We don't mind if the SFE decided to stand alone, merge with the Australian Stock Exchange or join forces with Computershare because our focus is on the SFE," Mr Petronella said
He said the SFE was the ``number one futures exchange in the region" and provided a powerful base for the AP/ELS futures and options contracts.
AP/ELS, which was constructed by Dow Jones with the help of the SFE, will start trading in Australia on 13September. Similar indices for the Japan and Hong Kong market would be traded next year, Mr Petronella said.
AP/ELS is a set of investable indices designed to meet the needs of institutions, mutual funds and other market participants looking for index-linked investments in the Asia-Pacific region. The AP/ELS-Australia index will comprise 35 stocks while the Hong Kong and Japan series will have 30 stocks and 100 stocks respectively.
A Dow Jones editor, Mr John Prestbo, said alliances between different exchanges would become a growing trend, with benefits including higher volumes and greater market liquidity.
``Investors like to go and trade between both the cash and derivatives markets and this will lead to greater volumes," he said.
Mr Petronella also signalled that Dow Jones was looking to tie up with other Australian companies as part of the group's focus on the Asia-Pacific region. He said Dow Jones was now in discussions with the broking firm Warburg Dillon Read about a deal involving the fixed-interest market.
© 1999 The Age
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