ASX issues 'please explain' to itself

The operator of the Australian stock exchange, ASX Ltd, has been forced to explain itself after its share price rose by ten per cent in the last week.

In doing so, ASX Ltd said on Tuesday it had been talking with some other exchanges about "possible business combinations".

ASX Ltd issued the kind of response that it would have sought from other companies whose share price moves dramatically, known colloquially as a "speeding ticket".

The response also followed media speculation on the factors behind the rise, which saw ASX Ltd's share price rise from $30.35 on Monday last week, to a peak of $33.91 on Monday this week before closing on Monday at $33.79.

The stock declined 27 cents, or 0.8 per cent, to close at $33.52 on Tuesday.

ASX said in a statement on Tuesday morning that many factors might have contributed to movements in the ASX share price.

"Since the release of the August 2010 Annual Report (on August 19), there has been a strengthening trend in some key metrics of ASX market activity compared to the same period last year, in particular in relation to derivative trading volumes," ASX said in its statement.

"For the first 12 weeks of the current financial year, stock option trade activity has lifted (up 7 per cent) and the futures market activity is showing signs of a strong recovery (up 36 per cent)."

ASX said it would provide further commentary at its annual general meeting, on Wednesday.

"Exchange-traded markets are undergoing a period of profound structural change," ASX said.

"ASX is conscientious in evaluating its strategic and competitive options in that environment and has had discussions with a small number of exchange groups regarding possible business combinations.

"None of those discussions has resulted in a disclosable transaction proposal."

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