THE CONFERENCE CALLER: Argonaut chairman & head of corporate finance Eddie Rigg opened the RIU Resurgence Conference in Perth with an interesting look at the importance of the role played by the ASX to the well-being of the resources industry.
The resources sector is the number one sector on the ASX by number of companies – around 750 in total.
That means approximately 40 per cent of all companies listed on ASX are resource companies that are currently operating in 80 different countries.
“Without question…the ASX is now dominating the global stock markets in resources,” Rigg told the opening session audience.
Rigg said the ASX has led the world over the past three years in terms of the number of resource Initial Public offerings (IPOs) and Follow On (FO) raisings.
“The number of transactions over in the last three years on ASX is more than all the other exchanges combined,” he said.
“Yes. New York has raised more money, but on a very few transactions.”
In the 2017- 2020 time-frame, the ASX saw over 1800 capital raisings, raising around $28 billion.
This compares most favourably versus the TSX, which used to be Australia’s biggest competitor, that raised around $13 billion featuring very few transactions- less than 200 over three years.
Since COVID the TSX welcomed around 30 raisings, while back home there have been over three hundred companies to have raised money since mid-March to the end of August (2020)
“Thankyou to marijuana and thankyou to crypto-currency because effectively you have imploded their market, making our market the dominant (resources) market,” Rigg said.
Follow-on raisings completed on ASX since COVID have resulted in over $7 billion hitting the boards, although this figure is partly distorted by $1.1 billion raised by Newcrest, nevertheless that is a lot of money going into the local industry.
Only 10 companies raised $100 million or more, make that 11 companies now with the raising completed by De Grey Mining this week.
“That lot of money is going to come up with a lot of discoveries,” Rigg declared.
“85 per cent of the raisings completed were done by companies with less than $100 million market cap.”
Rigg put the success being enjoyed by the local bourse down to its modus operandi, which he said stood out from the rest of the world’s exchanges.
“The ASX has wonderful rules, they are actually enhancing the rules to make sure we don’t get the undesirables back in our industry,” he stressed.
“It is a market that has enormous integrity. The capital raising rules in Australia are so far superior.”
“It’s a wonderful opportunity, it’s a wonderful industry, and it’s a wonderful market.”