ASX needs to counter TSX hold on Latin America

CONFERENCE CALLER: The Australian Securities Exchange (ASX) said its continual outperformance of other regional trading exchanges underpinned its case to be the exchange of choice for new IPOs or listings by joint stakeholders in Australia and Latin America’s future resources sector.

However, while the ASX based miners and explorers outgunned bourses such as Toronto and London in terms of capital investment across the heavily mineralised African continent, Australia was lagging in a similar comparison with its investment in Latin America’s mining sector.

Addressing the first day of the Paydirt 2013 Latin America Down Under resources conference in Sydney, ASX senior manager listing business development Eddie Grieve said that with a market capitalisation of $6.5 billion, the ASX itself had a larger market cap than Singapore and London.

“The ASX offers access to the world’s third largest pool of investment, has an annual turnover in excess of $1.1 trillion and is globally relevant with about 45 per cent of the market in foreign ownership.” Grieve said.

“We also have a world-class trading, clearing and settlement systems so our fundamentals are sound.

“So outside of Australia and Canada, the two other regions that attract around 40 per cent of the world’s exploration spend are Africa and Latin America – Africa around 16 per cent and Latin America around 24 per cent.

 

“In terms of Africa, over 220 ASX companies are now operating in Africa, more than on the Toronto and London exchanges, and we have raised $6.83 billion in the last five years, compared to $6.53 billion on Toronto exchanges.

“But it is from the Latin American quarter that we are behind, with Canada’s bourse clearly dominating that market – and to snare a greater share of Latin America’s listed exploration and mining capital is our greatest opportunity.”

Grieve said more than 96 ASX companies were now operating in Latin America, well up on recent years.

They are involved in more than 530 minerals projects there across 16 countries in central and South America.

“However, while our equity market appeal has lifted in terms of that arena, the total capital raised for Latin American projects by ASX companies over the past five years was $2.56 billion.

“This compares with more than $8.3 billion raised by Latin America entities on the Toronto exchanges in the same period – so we need to use the ASX’s superior liquidity in mining stocks compared to Toronto, to swing the capital markets balance more in favour of the ASX.”