ASX and Singapore Exchange halted trading in their shares today amid speculation the companies are in merger talks as competition heats up from rivals outside Asia.

The Singaporean bourse may make a takeover bid for ASX, Australia’s dominant stock exchange operator, on Oct. 25, the Australian newspaper reported on its website today. Matthew Gibbs, an ASX spokesman, had no comment beyond a statement today accompanying a request for a trading halt. Singapore Exchange spokeswoman Magdalyn Liew couldn’t be reached.

 

Chi-X Global Inc., an electronic-trading platform that has won preliminary approval to become a competitor to ASX, is working toward starting Australian operations by March, according to its local unit. Singapore Exchange and Chi-X Global, part owner of Europe’s largest alternative trading system, agreed in August 2009 to start the first exchange-backed dark pool in Asia.

 

“Some of the new kids on the block pose a serious threat to potential revenues and volumes,” said Chris Weston, a Melbourne-based institutional dealer at IG Markets. “ASX needs to find ways to evolve, and tying up with one of the old legacy exchanges would give them ideas, experiences, management and infrastructure at a time when they may have to cut fees and costs.”

 

ASX shares climbed 2.5% in Sydney today before being placed in a trading halt ahead of a “possible business combination,” according to a regulatory filing from the company. Singapore Exchange shares fell 2.8% before trading in its shares was halted.

 

A merger between the two would combine the operators of the Asia-Pacific region’s fifth- and eighth-largest stock markets, according to data compiled by Bloomberg. Australia’s market is worth about US$1.36 trillion ($1.77 trillion), while Singapore’s is about US$554.4 billion, the data show.