ON THE ROAD: On the opening day of the RIU Explorers Conference, National Stock Exchange (NSX) CEO and managing director Ann Bowering gave her reasoning on why the assembled companies should list with the alternative securities market. By Jack Baker
The NSX believes it can compete with the Australian Securities Exchange (ASX) and among global markets.
NSX recently closed offices in Newcastle and Melbourne and, under a new management team, opened its current head office in Sydney with the purpose of engaging with stakeholders and to demonstrate its role and relevance.
Currently trading more than 80 securities totalling over $4.5 billion via participating brokers that include Patersons, State One, Morgans and Macquarie, the NXS has updated its old direct access model and stocks can now be exchanged over an IRIS terminal the same you would with ASX.
“Our strategy is very clear,” Bowering told the large first day audience.
“Build a globally competitive exchange with a vibrant liquid and diverse debt and equity market competing head to head with ASX to attract the best listings in our market.”
Bowering believes the transparency and access of the NSX make it a viable alternative.
She stated that the NSX team works very closely with companies, giving the best chance of a successful listing and opportunity for a higher profile.
A key point of difference between the two exchanges is minimum spread requirements of 50 shareholders, targeted at allowing companies to access capital earlier, with lower cost and without the need to invest in excessive distribution.
She said their status as a dedicated listing and trading venue for equities gave them an advantage: “That’s what we eat, sleep, live and breathe.”
Bowering gave assurances that the corporate governance expectations and prospectus requirements of disclosure are the same no matter what exchange they are listed on.
“It goes to the heart of market integrity and investor confidence which underpins liquidity,” she said.
Australia has had a single stock market for the last 30 years, being the only advanced global market without a second exchange.
Bowering said the fact that the ASX top 200 has remained largely unchanged over the last 10 years showed inefficiency in the allocation of capital.
“On a global basis Australia has the fourth largest pool of investible funds and many fund managers look offshore to allocate their new capital,” she continued.
“It is important that the ASX has competition to facilitate innovation and broaden investment opportunities in the marketplace.”
Bowering said the ASX has made it clear who their target is: companies with a market capitalisation of $50 million to $500 million in the technology sector who come from foreign markets.
Alternatively, the sweet spot of the NSX was described as companies at IPO with market capitalisation ranging from $3 million to $50 million with proven growth potential and investment stories that resonate with potential backers.
Bowering declared that the NXS has put immediate focus on feeling out the resources sector of Western Australia.
“That’s why we’re here in WA,” she said.
“Because we know where Australia grows…we think there’s an opportunity in this sector.”