ASX was originally a mutual organization of stockbrokers, like its predecesor state stock exchanges. In 1996, however, its members decided to demutualize, which required legislation of the Australian parliament. The change of status took place on 13 October 1998, and the next day, ASX listed on its market. Following demutualization and listing, ASX became a shareholder-owned company.
The ASX's mission statement is "to provide, for the benefit of all participants, the most internationally competitive and fair market for financial securities and derivatives so as to enhance Australia's position as a regional financial center."
Three principal markets are provided by ASX: equities trading; debt securities; equity and index derivatives. ASX is also an important conduit for overseas equity investment in Australia. More than 20% of trading on the equities market is attributed to foreign investors.
ASX's principal activities include providing a trading system, a clearing and settlement system and regulation of the securities market. The role of its Companies Division includes providing a well-informed market for financial securities to secure the confidence of investors and entities in the conduct of the market.
The ASX registered a strong performance in 1999 as it enjoyed record volumes in the equities market and increased trading in derivatives. During its annual general meeting, the chairman, Maurice L. Newman, reported: "Over the last 10 years, our market has expanded from $163 billion to $578 billion in capitalization to become the 11th largest in the world. All of our markets and settlement processes are automated, unlike many exchanges around the world, and our technology is leading-edge."
A highlight of 1999 was the strategic alliance forged between ASX and the Nasdaq Stock Market. The two exchanges agreed to work toward a new approach called co-listing. This will allow Australians to invest through ASX in Nasdaq's premier benchmark technology sector through a single vehicle. Conversely, Nasdaq will entertain listing appropriate ASX index-based products in the United States. Under the co-listing approach, enterprises planning to raise capital, in the form of IPOs or add-on offerings, can choose to bring the new listing to both markets and further capitalize on the joint marketing effort of the two exchanges.
These co-listings could cover two situations. The first is where an enterprise wishes to raise capital on one market only, but wishes to list and trade on both markets from the time of the capital raising. The second is where an enterprise wishes to raise capital on both markets. In either situation, the two exchanges will work together to minimize the cost and complexity of co-listing on the two markets.
The ASX has also established formal relationships with stock exchanges in Singapore, Malaysia, Korea, Indonesia, the Philippines, Taiwan and Thailand. The chairman pointed out that "where mutual market access occurs, they will mean that Australian investors will be able to buy shares on international markets using familiar ASX services. This will be important as compulsory superannuation requires fund managers to diversify beyond Australia. It will also provide effective, low-cost access for private investors."
The ASX plans to continue its strategy of innovation and investing in the best technology. According to its chairman, "We are building a dynamic exchange and positioning it to be fully integrated into the global financial markets of the 21st century."
For inquiries, contact:
The Australian Stock Exchange
Exchange Centre
20 Bridge Street
Sydney NSW 2000
Tel: +61-2 9227-0000
Fax: +61-2 9235-0056
Email: info@asx.com.au
Web site: www.asx.com.au/
For profiles and other corporation information on listed public companies in the ASX, you can also visit the Australian Financial Services Directory. Search for companies alphabetically or by industry.
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