Page 1

WWW.AUSBN.COM.AU


FINANCE | ASX


Australian Business Network

The premier single board exchange for all mining companies


FINANCE | ASX

The Australian Securities Exchange (ASX) is unquestionably one of the world’s premier stock markets with a total market capitalisation of around AUS$1.8 trillion, putting it into the top 10 of listed exchange groups globally. However, in terms of capital raised from IPOs and follow-ons in the mining sector, ASX regularly finds itself in the top three international stock markets since the year 2000, along with the London (LSE/ AIM) and Toronto (TMX) markets. ASX is comprised of several sectors, the largest of which are financials and resources, particularly the mining sector which contributes 21% to the total market capitalisation and 46% of its listed companies. The Sydney-based exchange has been with the mining industry throughout all of its historical fluctuations, most recently in 2015 when a commodities price crash onset a difficult period for the sector. Yet as prices steadily recover the exchange has witnessed a flurry of activity amongst investors and issuers alike. With nearly half of its listed entities originating from the mining industry, listing and capital raising on ASX is highly correlated


Australian Business Network


FINANCE | ASX

ASX’s head of listings and issuer services Eddie Grieve


Australian Business Network with commodity prices, therefore when prices across the sector grinded to a new nadir a few years ago, the exchange had its quietest year for new mining listings in a decade, according to ASX’s head of listings and issuer services Eddie Grieve. “In 2015, we had just three mining IPOs but immediately bounced back to 13 in 2016 and

Steeped in mining history However, ASX will always be closely associated with the mining industry, owing to Australia’s long history of resource exploration stretching back to the 19th century when the great gold rush and mineral boom coincided with the first formation of stock exchanges in Australia.

in 2017 to date we’ve had 26, so you can see

“We have a long history and a unique

the improvement,” says Grieve.

combination of mining expertise. It’s a great mining centre but it’s also a very strong

“It’s also evident in the capital raising stakes

equity capital market,” says Grieve.

where in 2016 we had $2.8 billion raised and this year [2017] we have raised $5.4 billion

A key factor underpinning ASX’s strength as

already.”

an equity market is Australia’s compulsory superannuation system, which has

Although the mining industry remains

significantly contributed to it having the

the largest listed sector on ASX, there has

largest pool of funds under management

been increased movement towards sector

in the Asia Pacific region, in excess of $2.2

diversification in recent years, which is

trillion.

something that executive general manager of listings, issuer services and investment

This massive pool of investable funds in

products Max Cunningham is quick to point

Australia is expected to further increase to

towards.

more than $6 trillion by 2030, giving ASX an incredibly strong basis on which to grow in

“Whilst we’ve probably been hit with the

the next decade or so and solidify its position

worst mining recession for the last 20-

as a premier hub for mining listings.

30 years, the listing franchise part of our business concurrent to that period was

“We have a very knowledgeable investor

probably having its best period in a decade,

base, a strong community of analysts and an

which was due to other sectors, most notably

ecosystem of professionals across several

tech.”

spheres such as accounting and law, all of whom have mining expertise,” proclaims

The exchange has also had plenty of success

Grieve.

with regards to geographic diversification, attracting companies from countries like New Zealand, Israel and the US.

“We have found that ASX is often a centre


FINANCE | ASX

South32 listing ceremony


Resource GlobalNetwork Network Australian Business

“We have a very knowledgeable investor base, a strong community of analysts and an ecosystem of professionals across several spheres such as accounting and law” – Eddie Grieve, head of listings and issuer services for projects based in Western Australia, but people come to tap into this expertise not only for projects in Australia, but projects globally as well such as those in Africa and Latin America.” Another string to ASX’s bow is its long term affiliation with the Australasian Joint Ore Reserves Committee (JORC) Code, which was developed in the 1970s to provide a mandatory system for the reporting of resources and reserves within ASX listing rules. The JORC Code has since developed into an international blueprint for mining disclosure standards, after being adopted into Canada’s NI 43-101 mineral projects framework, along with other leading exchanges in countries like the US, South Africa, the UK/Europe, Chile and Peru. Furthermore, while the corporate governance requirements of ASX go towards engendering investor confidence, the Australian mining industry and regulators have worked together over the years to ensure that


FINANCE | ASX the regulatory environment is robust but not overly prescriptive, another attractive element of listing on ASX.

Single board Unlike several major global exchanges where separate boards have been created catering to the junior market (such as London’s AIM and the TSXV of Toronto), ASX is comprised of just one primary board. Cunningham views this key differentiator in an overwhelmingly positive light. “One of the things where we are very favourable compared to most major exchanges is that we have only one single board and that means you get universal connectivity with every investor in the market,” he says. “I think it’s a key competitive advantage for us in the resource-mining sector and other international sectors where we are competing for listings.” Cunningham reveals that ASX did have a second board back in the 1980s, but it proved unpopular with investors and junior companies felt the arrangement created a sense of being a second class listing among those on the second board. Now instead of having a smaller board, ASX has a minimum listing criteria which is set at an appropriate level for junior and early stage mining companies, which also protects from the risk of having companies enter at too early a stage.


Australian Business Network

Kirkland Lake Gold listing ceremony


FINANCE | ASX

Max Cunningham

executive general manager of listings, issuer services & investment products


Australian Business Network

With this in mind, ASX claims to have

ASX continues to vie with rival exchanges for

nurtured a long list of mining companies

international supremacy in the public listing

from budding juniors into mid and large-cap

space, particularly in the global mining sector.

players, and in some cases into international

In fact, during the 2016/17 period to date

mining giants.

ASX was the number one exchange in terms of number of IPOs ahead of LSE and TSX,

“We say cheekily that the mining community

which Grieve and Cunningham attribute to

is the home of the start-up. All these big

its unique structure and the wealth of mining

companies like BHP and Rio Tinto to some

expertise across the exchange.

extent were start-ups that were funded on the ASX in the very early stages.”

“I think for a long time to come ASX will be a global home for the mining sector, both for

A more recent example is the meteoric rise

issuers and investors,” predicts Cunningham.

of Fortescue Metals Group (FMG), which was

“I think it will be a dominant sector for us in

formed in the mid-2000s but has quickly risen the small, mid and large-cap space.” to become the 13th largest mining company in the world after listing on ASX.


Published by Anderson Murray Media Ltd

To tell the business market your story, contact jacob@ausbn.com.au

WWW.AUSBN.COM.AU

ASX | AusBN v4i1  
ASX | AusBN v4i1