HOUSTON (Reuters) – Texas financier Allen Stanford used lies and bribes to steal the hard-earned savings of his customers, prosecutors said on Tuesday.

The former billionaire is accused of selling certificates of deposit from his bank in Antigua and using the money to finance his lifestyle, in one of the biggest white collar cases since Bernard Madoff.

"He told them lie, after lie, after lie," prosecutor Gregg Costa told the jury at the start of Stanford's trial on criminal fraud charges in federal court in Houston.

Stanford, 61, dressed in a grey suit and white shirt, pleaded not guilty to a 14-count indictment. "I plead not guilty to every count," the former billionaire said in an emphatic voice.

He rocked in his chair, listening intently as Costa laid out the government's case of a sprawling $7 billion Ponzi scheme originating with Stanford International Bank in Antigua. Stanford used it as "his own private piggy bank," Costa said.

"Really, that is the perfect name for the bank, because the bank was there to enrich Mr. Stanford."

Stanford spent millions of dollars of investor funds on his hobby of cricket, his private airplanes and a company that was formed to take care of his yacht, the Sea Eagle, Costa said.

He bribed his accountant and a regulator in Antigua in an effort to keep U.S. authorities at bay, Costa said.

Robert Scardino, one of Stanford's lawyers, told the jury that the Texas native was an astute businessman whose business was ruined when the government seized it in 2009.

"Stanford was kind of an absentee CEO, a visionary," Scardino told jurors.

He argued that every dime investors put into CDs issued from the Antigua bank was repaid over the course of 22 years.

"He paid every penny that was promised," Scardino said. "Never once failed, no evidence of a fraud."

Stanford's businesses and investments were all legitimate until the U.S. Securities and Exchange Commission filed civil charges in February 2009 and seized all of Stanford's assets, Scardino said.

Witnesses for the prosecution include former employees, financial advisers who allegedly peddled certificates of deposit for the bank and Stanford's former chief financial officer, James Davis, who is the only co-defendant who has pleaded guilty to the scheme.

Stanford will take the stand to answer any questions the prosecution has and talk about his charitable works on Antigua, Scardino said.

The defense may also call accountants and other financial experts who can attest to the accuracy of the bank's documents, Scardino said.

(Reporting by Anna Driver; Editing by Eddie Evans, Bernard Orr)

NEW YORK – A downward revision of U.S. economic growth in the third quarter sent stocks lower Tuesday. Higher borrowing costs for Spain also renewed worries about Europe’s debt crisis.

The Commerce Department reported that the U.S. economy grew at a 2 percent annual rate from July through September, down from its initial estimate of 2.5 percent. Economists had expected the figure to remain the same.

The Dow Jones industrial average lost 53.59 points, or 0.5 percent, to close at 11,493.72. Aluminum maker Alcoa Inc. led the Dow lower. The Dow had been down as many as 113 points shortly before noon.

The Dow plunged 249 points Monday as a congressional committee failed to reach a deal to cut budget deficits. The deadlock raised fears that rating agencies might lower the U.S. government’s credit rating if Congress tries to circumvent the automatic spending cuts that are supposed to occur in the event of an impasse. Some Republicans have said they would try to block cuts to defense spending.

“Markets are looking for clarity, and you didn’t get that from the super-committee,” says Steven Ricchiuto, chief economist at Mizuho Securities. “There’s no reason to believe the economy is going to get stronger.”

Across the Atlantic, there were more signs of trouble in Europe’s debt crisis. Spain was forced to pay sharply higher interest rates in an auction of short-term debt. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new, center-right government coming to power this week.

Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels. Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent on the bond market. The rate on Spain’s own benchmark 10-year bond is dangerously close to that level, 6.58 percent.

The Standard & Poor’s 500 fell 4.94 points, or 0.4 percent, to 1,188.04. The Nasdaq composite fell 1.86, or 0.1 percent, to 2,521.28.

It was the fifth straight decline for the S&P 500, the longest losing streak since August. The S&P has lost 5.5 percent over the past week on worries that Spain could get dragged into Europe’s debt crisis and as Congress neared a deadlock over cutting the U.S. budget deficit.

In other trading, Netflix Inc. sank 5.4 percent to $70.45, the lowest level since March 2010. The online video rental company said it raised $400 million from selling debt and stock as it tries to recover from a consumer backlash following price hikes.

Campbell Soup Co. sank 5.3 percent to $31.84 after reporting a 5 percent drop in net income. The company said price increases were not enough to offset lower volume in its soup and beverage businesses.

Medtronic Inc. rose 4.4 percent to $34.75. The world’s largest medical device maker reported higher-than-expected earnings and reaffirmed its full-year earnings outlook.

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AP Business Writer Bernard Condon contributed to this report.

NEW YORK (Reuters) – Stocks were little changed in volatile trade on Tuesday as Italy's government teetered on the brink in the latest turn in the long-simmering euro zone sovereign debt crisis.

Prime Minister Silvio Berlusconi appeared to lose his parliamentary majority after a key vote, piling further pressure on him to resign.

Berlusconi won a vote on the ratification of the country's debt-weighed public finances because the opposition abstained. But he obtained only 308 votes, below the 316 needed for an absolute majority in the 630-seat Chamber of Deputies.

"There is not a lot to focus on in terms of fundamentals, so we are still trapped in this headline box, if you will, and every movement seems to be based on that," said Kevin Kruszenski, director of equity trading at KeyBanc Capital Markets in Cleveland.

"Maybe it is just another nail in the coffin of the entire euro crisis, slowly but surely it seems to be sort of unfolding and progress is being made."

The PHLX Europe sector index (.XEX), which includes major European shares, advanced 0.6 percent.

Italian 10-year borrowing costs touched a new record of 6.74 percent, raising the risk that Rome's massive debt — the second highest in Europe at 120 percent of gross domestic product — could spiral out of control.

The Dow Jones industrial average (.DJI) was down 1.74 points, or 0.01 percent, at 12,066.65. The Standard & Poor's 500 Index (.SPX) was up 1.96 points, or 0.16 percent, at 1,263.08. The Nasdaq Composite Index (.IXIC) added 6.68 points, or 0.25 percent, at 2,701.93.

With little on the U.S. economic calendar this week and earnings season drawing to a close, investors were fixed on Europe. According to Thomson Reuters data, of the 442 S&P 500 companies that have reported earnings, 70 percent topped expectations.

U.S. markets have been closely tied to the fortunes of the euro while volatility has been tethered to sovereign debt. The euro hit a session high against the dollar ahead of the Italian vote.

Activision Blizzard Inc (ATVI.O) advanced 1 percent to $13.88 as the video-game maker began selling the highly anticipated new entry in its "Call of Duty" series.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

ATHENS, Greece – The Greek government teetered and stock markets around the world plummeted Tuesday after a hard-won European plan to save the Greek economy was suddenly thrown into doubt by the prospect of a public vote.

One day after Prime Minister George Papandreou stunned Europe by calling for a referendum, the ripples reached from Athens, where some of his own lawmakers rebelled against him, to Wall Street, where the Dow Jones industrial average plunged almost 300 points.

Papandreou convened his ministers Tuesday night, and a spokesman said the prime minister was sticking to his decision to hold the referendum, which would be the first since Greeks voted to abolish the monarchy in 1974. Papandreou has also called a vote of confidence in his government, to be held midnight Friday.

“The government is not falling,” said Angelos Tolkas, a deputy government spokesman.

Under a recently amended law, a referendum can be called by presidential decree on issues of grave national concern, if it is proposed by the cabinet and approved by absolute majority in the 300-member parliament.

With several of his lawmakers rebelling, it was unclear whether Papandreou would have enough support to push the idea through. Although he had not set a specific question or date for the referendum, ministers indicated it would likely be held in January.

Papandreou’s decision upended a deal that was the product of months of work by European leaders who were trying, sometimes opposed by their own people, to agree the details of a second bailout for Greece and shore up their own economies in the name of saving the euro, the common currency.

The deal would require banks that hold Greek government bonds to accept 50 percent losses and provide Greece with about $140 billion in rescue loans from European nations and the International Monetary Fund.

But Greeks have been outraged by repeated rounds of tax increases and salary and pension cuts imposed as the government struggles to meet the conditions of a first, $153 billion bailout the country has been relying on since May 2010. With Greece facing a fourth year of recession next year, unions have held frequent strikes, and protests have often degenerated into riots.

A Greek rejection of the second rescue package could cause bank failures in Europe and perhaps a new recession in Europe, the market for 20 percent of American exports. It could also cause Greece to leave the alliance of 17 nations that use the euro.

European leaders made no secret of their displeasure.

“This announcement surprised all of Europe,” said a clearly annoyed French President Nicolas Sarkozy, who has been scrambling to save face for Europe before he hosts leaders of the Group of 20 major world economies later this week.

“Giving the people a say is always legitimate, but the solidarity of all countries of the eurozone cannot work unless each one consents to the necessary efforts,” he said.

French lawmaker Christian Estrosi was even more direct. He told France-Info radio that the move was “totally irresponsible” and reflected “a wind of panic” blowing on Papandreou and his party.

“I want to tell the Greek government that when you are in a situation of crisis, and others want to help you, it is insulting to try to save your skin instead of assuming your responsibilities,” Estrosi said.

Sarkozy and German Chancellor Angela Merkel, who have been at the forefront of Europe’s efforts to contain national debt, talked by phone and agreed to convene emergency talks Wednesday in Cannes, France. Papandreou will also attend.

Merkel also spoke by telephone Tuesday with Papandreou, his office said.

The response was brutal in the international financial markets, especially in Europe. Greece’s general price index plunged to close down 6.92 percent, while in Germany the Dax index, the major stock market average, lost 5 percent — the equivalent of about 600 points on the Dow.

The French stock market closed down 5.4 percent, the Italian 6.7 percent and London 2.2 percent.

“Talk about your all-time bonehead moves,” said Benjamin Reitzes, an analyst at BMO Capital Markets.

In New York, the stocks of major banks like Citigroup and JPMorgan Chase were hit hard. The value of the dollar rose, and bond prices jumped so dramatically that analysts said they were stunned.

Analysts said the bond action reflected fears that the turmoil in Greece would tear at the fabric of Europe’s financial system and create a crisis that could engulf the entire European Union, which together forms the world’s largest economy.

“This brings all of the concerns about Europe back to the front burner,” said Scott Brown, chief economist at Raymond James. “If this ends up turning into a financial catastrophe in Europe, then no one will escape it.”

Papandreou’s decision was such a surprise that even the finance minister, Evangelos Venizelos, apparently did not know about it ahead of time. He was unable to make the ministers’ meeting Tuesday after being hospitalized with stomach pains. He was to remain in the clinic overnight.

The main opposition conservatives called for Papandreou’s resignation. But criticism was also intense from Papandreou’s own Socialists, who have been clinging to a shrinking parliamentary majority.

A public vote would allow the party, vilified by an increasingly hostile public during months of strikes, sit-ins and violent protests over austerity measures, to shift responsibility for the country’s fate to the Greek people themselves.

But it was unclear whether Papandreou’s government would last long enough for the referendum to take place — or even until Friday’s confidence vote.

Several Socialist lawmakers openly rebelled, with one going as far as defecting. Milena Apostolaki’s departure whittled Papandreou’s parliamentary majority to just two deputies, leaving the party with 152 seats in the 300-member legislature.

Apostolaki’s departure “shows clearly that the government itself is losing gradually its cohesion,” said George Tzogopoulos, a political analyst from the Hellenic Foundation for European and Foreign Policy.

He estimated that “that the government will not be able to remain in power for many days” and said it was likely that Papandreou “will call an early election very soon.”

Papandreou did not ask for a vote last year, when Greece got its first round of international bailouts, about the same size as what is being debated now. Some lawmakers wondered why he called for one this time.

“Yesterday’s surprise and irrational announcement of the referendum has led me to doubt something that I considered certain until yesterday: That I am a member of a group that is striving to save our country from bankruptcy,” Socialist deputy Hara Kefalidou said in a letter to Papandreou. “I cannot back a referendum which is a subterfuge by a government that appears unwilling to govern.”

Jean-Claude Juncker, who chairs eurozone ministerial meetings, said the referendum was a dangerous decision that could endanger Greece’s next installment of bailout loans — without which the country will run out of money in mid-November.

Juncker told RTL radio in Luxembourg that the vote proposal changes the conditions of that deal, according to his spokesman, Guy Schuller.

It was not only international leaders who were taken by surprise.

Venizelos, the finance minister, “found out about it along with all other Greeks” during Papandreou’s speech, which was televised live, an official close to Venizelos told The Associated Press. The official spoke on condition of anonymity to discuss sensitive details.

From his hospital bed, Venizelos launched a telephone campaign to shore up international support for the debt deal, speaking with the German finance minister, the head of Deutsche Bank and the monetary affairs chief for the European Union, among others.

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Associated Press writers Derek Gatopoulos and Nicholas Paphitis, and APTN producer Ted Tongas in Athens, Angela Charlton in Paris, Raf Casert in Brussels and David McHugh in Berlin contributed.

FRANKFURT, Germany – The European Central Bank says it will “actively implement” a bond-purchase program that could boost Spanish and Italian bonds and drive down interest yields that threaten those countries with financial disaster.

Such purchases by the central bank could help Rome and Madrid fend off market trouble until a strengthened eurozone bailout fund is approved to help them.

Sunday’s statement comes as officials worked to ward off more turmoil as financial markets prepared to reopen on Monday after the U.S. lost its triple-A bond rating from Standard & Poor’s after market close Friday. Officials from the Group of 20 rich and developing countries also held talks aimed at minimizing market shocks. G-7 officials were reportedly to confer before markets open in Asia on Monday open as well.

The burst of activity on a Sunday in August underscored how government debt levels in Europe and the U.S. have unsettled financial markets — and sharpened fears that debt troubles could derail the global recovery from the 2007-2009 financial crisis.

The statement from the ECB, issued after a conference call among its officials, did not say which countries’ bonds it would buy.

But the beneficiaries are expected to be Italy and Spain, market analysts say. Italy and Spain are trying to avoid the spiraling interest rates that forced Greece, Ireland and Portugal to seek bailout loans. Purchases could drive up bond prices, which move in the opposite directions from interest yields.

Last week, yields for both countries were above 6 percent, moving toward the levels that upended the three smaller countries. Italy in particular is regarded as too large for Europe’s euro440 billion bailout fund to rescue, raising the possibility of a financial disaster that could devastate the eurozone economy.

Analysts at Royal Bank of Scotland said recent moves by Italy to strengthen its finances helped bring the ECB to its decision. The bank was reluctant to come to the rescue unless governments first close the holes in their finances.

The statement Sunday said it was “essential” for them to follow through on their commitments.

Italian Premier Silvio Berlusconi said last week that Italy would balance its budget in 2013, a year earlier than previously expected, and speed up other budget measures.

“The ECB will start a large scale bond buying of Italian and Spanish sovereign bonds on Monday morning in our view as euro area governments have signed up to additional fiscal measures where needed,” they said.

They said the purchases could run euro2.5 billion ($3.5 billion) a day and “will stop the collapse of the bond market in countries under stress.”

Italy has debt equivalent to 120 percent of annual economic output, the second highest in the eurozone behind Greece, and weak prospects for economic growth that would help pay it down.

Sunday’s meeting comes just hours before the opening of financial markets in Asia, after Friday’s downgrade of the U.S. credit rating from AAA to AA plus by ratings agency Standard & Poor’s has led to fears of more stock market plunges.

Last week already saw markets around the world deep in the red amid fears the global economy may be weakening and the uncertainty created by Europe’s sovereign debt crisis.

In a sign of early fallout, Middle East markets tumbled Sunday on the first day of business after the downgrade.

Middle East markets, open Sunday through Thursday, were the first to react to the downgrade. Egypt’s benchmark EGX30 index fell more than 4 percent, and other Gulf markets also were sharply lower.

Israel’s Tel Aviv Stock Exchange delayed the start of the week’s first session after pre-market trade showed the benchmark index dropping more than 6 percent because of concerns over the U.S. debt rating cut. Exchange spokeswoman Idit Yaaron said the start was pushed back by 45 minutes “so market players will have time to react logically and not under pressure.”

Israel’s benchmark TA-25 index plunged 7 percent to close at 1,074 points.

U.S. markets and others reopen Monday but have had rough patches recently. The Dow Jones industrial average dropped 512 points Thursday, its worst performance since the financial crisis of 2008, and regained only a fraction of that drop Friday.

Many economists see the world’s big central banks as the last line of defense at this moment in the crisis, after policymakers in Europe and the U.S. have failed to agree on the kind of shock-and-awe moves that many investors demand.

Investors have also been calling on the U.S. Federal Reserve to start pumping money into the American economy again to help underpin the slowing economic recovery.

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Mari Yamaguchi reported from Tokyo. Kelly Olsen in Seoul, South Korea; Adam Schreck in Dubai; and Christopher Bodeen in Beijing contributed to this report.

NEW YORK (Reuters) – Stocks posted gains for the fourth day on Tuesday on growing hopes that Greece will avoid a debt default, adding momentum to the market’s recent rebound.

The Nasdaq had its biggest percentage gain since October, while the S&P 500 marked its best day in two months in what investors believe could be continued short-term buying from deeply oversold levels.

The Nasdaq reclaimed positive territory for the year and led the market’s advance, boosted by a jump in semiconductor stocks. A semiconductor index (.SOX) shot up 2.5 percent, its best gain since April.

In a vote after the market’s close, Prime Minister George Papandreou’s cabinet won a vote of confidence. It is seen as the first step in moving closer to a resolution of Greece’s debt crisis.

It could pave the way for more aid and also remove a source of constant worry about global banks’ exposure to the euro zone’s debt problems. The PHLX KBW Bank Index (.BKX) gained 1.1 percent after touching a 52-week high earlier in the day.

“If you’re an investor, you don’t want this Greek debt crisis to touch off another round of financial contagion around the world,” said Michael Sheldon, chief market strategist of RDM Financial, in Westport, Connecticut.

Volume was lighter than normal, however, with just 6.69 billion shares traded on the New York, Nasdaq and NYSE Amex exchanges, compared with a daily average of 7.58 billion.

The Dow Jones industrial average (.DJI) rose 109.63 points, or 0.91 percent, to 12,190.01 at the close. The Standard & Poor’s 500 Index (.SPX) gained 17.16 points, or 1.34 percent, to 1,295.52. The Nasdaq Composite Index (.IXIC) climbed 57.60 points, or 2.19 percent, to 2,687.26.

The Nasdaq ended Tuesday’s session above its 50- and 200-day moving averages, for the first time since May 31.

The Dow and the S&P 500 finished last week with gains after six weeks of declines. The Nasdaq, however, ended the week in the minus column.

The S&P 500 is down 5 percent since its May 2 high.

After nearing its 200-day moving average Monday, the S&P 500 rebounded solidly above the level. Analysts saw 1,360 as the next technical level on the upside.

During the session, the Nasdaq also got a lift from U.S.-traded shares of Research In Motion Ltd (RIM.TO)(RIMM.O), which gained 10.3 percent to $28.55 after falling about 7 percent on Monday.

Among stock gainers, Best Buy Co Inc (BBY.N) rose 2.7 percent to $32.38 after the electronics retailer raised its dividend and approved a stock-repurchase plan.

On the downside, Walgreen Co (WAG.N) fell 4.2 percent to $43.28 after it failed to renew a deal with pharmacy benefits manager Express Scripts Inc (ESRX.O). Express Scripts shares rose 0.4 percent to $54.99.

The Federal Open Market Committee began a two-day meeting, with an announcement expected Wednesday afternoon, followed by Federal Reserve Chairman Ben Bernanke’s new conference.

The Fed is expected to cut its growth forecast for 2011, but Bernanke probably will continue to argue the slowdown is temporary.

Advancing stocks outnumbered declining ones on the NYSE by nearly 6 to 1. On the Nasdaq, advancers beat decliners by about 4 to 1.

(Reporting by Caroline Valetkevitch; Additional reporting by Ashley Lau; Editing by Jan Paschal)

NEW YORK – A surge in oil and the threat of a government shutdown weighed on stocks Friday.

Investors kept one eye on Washington, where Republicans and Democrats were in the final day of talks to reach a budget agreement. Without a deal, the federal government is expected to stop all services that aren’t considered essential. That means most economic reports would be suspended. Sales of debt would continue.

Benchmark crude oil jumped $2.49 to settle at $112.79 per barrel on the New York Mercantile Exchange. That’s the highest price since Sept. 22, 2008.

Over the past two months, most stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.

The Dow Jones industrial average lost 29.44 points, or 0.2 percent, to close at 12,380.05. The Standard & Poor’s 500 index slipped 5.34, or 0.4 percent, to 1,328.17. The Nasdaq composite lost 15.72, or 0.6 percent, to 2,780.42.

The Dow ended the week flat, while the S&P and Nasdaq lost 0.3 percent. All three indexes made gains in the previous two weeks.

Transportation companies fell. Delta Air Lines Inc. dropped 3.9 percent, and United Parcel Service Inc. lost 1 percent. Energy companies rose, leading the 10 industry groups within the S&P 500. Occidental Petroleum Corp. rose 2.6 percent, and Anadarko Petroleum Corp. rose 1.6 percent.

Todd Salamone, director of research at Schaeffer’s Investment Research, said most stocks tend to rise along with oil prices over the long term. “The recent breakdown in the pattern has largely been due to fears of supply shocks,” he said. “But the oil rally could also be attributed to a stronger world economy.”

World markets rose broadly. The Euro Stoxx 50, an index of European blue chips, gained 0.7 percent. Japan’s benchmark Nikkei index rose 1.9 percent.

Expedia Inc. rose 13 percent, the most in the S&P 500 index, after it said it would split off its TripAdvisor.com division.

More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.7 billion shares.

NEW YORK – The stock market edged higher in early trading Friday, a day after another big earthquake in Japan sent indexes lower.

Investors will be watching Washington, where Republicans and Democrats are in the final day of talks to reach a budget agreement that would prevent a government shutdown. A shutdown will close non-essential government services, including the publication of most economic reports.

The Dow Jones industrial average gained 11 points, or 0.1 percent, to 12,420 in morning trading. The S&P 500 rose 3 points, or 0.2 percent, to 1,336. The Nasdaq composite added 3, or 0.2 percent, to 2,798.

Gains were spread across the market. Technology companies were the only member of the 10 company groups that make up the S&P index to fall.

Oil futures were nearly 1 percent to $111.14. Over the past two months, stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.

Todd Salamone, director of research at Schaeffer’s Investment Research, said that stocks tend to rise along with oil prices over the long term. “The recent breakdown in the pattern has largely been due to fears of supply shocks,” he said. “But the oil rally could also be attributed to a stronger world economy.”

World markets rose broadly. The Euro Stoxx 50, an index of European blue chips, gained 0.8 percent. Japan’s benchmark Nikkei index rose 1.9 percent.

Expedia Inc. gained 12 percent, the most of the 500 stocks in the S&P index, after the company said it would split off its TripAdvisor.com division.

Cisco Systems. Inc. fell nearly 1 percent, the most of the 30 stocks that make up the Dow average.

U.S. stocks ended Thursday with small losses after a 7.4-magnitude earthquake struck Japan. The Dow Jones industrial average fell as many as 96 points in morning trading, but recovered most of its losses after a tsunami warning was lifted.

Friday is the last trading day before the next round of corporate earnings reports begins with Alcoa Inc.’s report on Monday.

SYDNEY (Reuters) – A A$7.3 billion ($7.1 billion) bid by the Singapore Exchange (SGXL.SI) to take over its Australian rival is faltering as the Australian government, the regulator and a key opposition party are all set to reject it, the Sydney Morning Herald said.

The Foreign Investment Review Board was unlikely to support SGX’s cash and share bid for the Australian Securities Exchange (ASX.AX) but even if it did, the Treasury, whose approval is also necessary, would stop the deal, the paper quoted a senior government source as saying on Saturday.

“If (the FIRB) doesn’t kill it, we will,” the source told the paper.

In addition, the Nationals, a key party in the conservative opposition Coalition, would “ferociously” oppose the deal, Barnaby Joyce, a top party official, told the paper.

The deal, first announced in October, has already been under pressure from Australian politicians — whose approval is necessary to lift a 15 percent shareholder cap — as it was seen as ceding control over a key national institution and a de-facto monopoly.

The SGX last month improved the terms of its offer but it is still far from a merger of equals, as urged by several key political leaders, and SGX Chief Executive Magnus Bocker earlier this month told Reuters there would be no more incentives to win control of ASX.

Another argument by opponents has been that moving effective control of the bourse to Singapore would reduce Sydney’s standing as a regional financial hub.

The Treasury has repeatedly declined to comment, saying it will not form an opinion on the deal until the FIRB has made its recommendation. The SGX launched its application with the FIRB earlier this month and the regulator has 30 days to make an initial ruling.

The Liberals, the biggest party in the opposition coalition, have said the government has yet to prove the deal would provide net benefit to Australia, therefore it had reservations.

Exchanges around the world are involved in merger talks to build scale and reduce costs amid increased competition from dark pools and other alternative electronic trading platforms.

However, some major cross-border deals, such as the Deutsche Boerse’s (DB1Gn.DE) plan to acquire NYSE Euronext (NYX.N), and London Stock Exchange’s (LSE.L) plan to combine with Canada’s TMX Group (X.TO), have run into some nationalistic opposition.

(Reporting by Balazs Koranyi; Editing by Kim Coghill)