Bakery franchise operator Brumby's has welcomed the announcement
that the Bendigo Stock Exchange and the Newcastle Stock Exchange
have executed a non-binding heads of agreement which commits both
parties to work towards a merger.
The move came just days after Brumby's celebrated its share price
lifting from $0.55 to $0.95 in the 12 months since it listed on
the BSX in December 2003.
Brumby's managing director Michael Sherlock said he strongly supported
the merger plan of the two stock exchanges.
"A merger would produce a more robust market for small micro-cap
companies like Brumby's,'' Mr Sherlock said.
"The combination of the BSX and NSX would give investors more
confidence about such secondary markets and give Brumby;'s shareholders
greater access to liquidity.''
Since listing on the BSX 12 months ago, the market for Brumby's
has reflected strong buyer support and limited selling with turnover
of 850,000 shares.
In that period, Brumby's market capitalisation has risen from $6,737,066
to $11,636,749, an increase of $4.9 million.
In a statement, NSX chairman Raymond Whitten and BSX chairman Geoffrey
Barrow jointly announced the signing of a heads of agreement committing
both partners to work towards a merger.
"The directors of both companies agree there is an excellent
opportunity to create a viable, solid securities exchange that is
complementary to Australia's primary market, the Australian Stock
Exchange (ASX),'' they said.
"Small business is the engine of Australia's economic growth
and it is essential that we have an efficient structure that provides
liquidity of securities and creates the market to raise capital
to enable these businesses to expand.
"Both businesses see there is a clear demand and need to provide
capital flows to the smaller sectors within our growing economy.