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The Australian Stock Exchange is believed to have had origins as far back as the 1800s. The Australian Stock Exchange merged with the Sydney Futures Exchange on 5 December 2006 and the new entity became known as the Australian Securities Exchange (ASX). It opens at 10 am weekdays and closes at 4 pm. The ASX is closed on weekends.
The ASX is Australia’s primary exchange market and although not as large as other global markets is still listed in the top 10 alongside its foreign counterparts, NASDAQ, FTSE and the New York Stock Exchange. The ASX tends to fluctuate with these markets, which often leads to the threat of market failure due to the pressure placed on the Australian market from foreign exchanges.
As of 13 September 2007, 173 new companies had listed with the ASX since the beginning of the year. There are in the area of 200 new additions a year. In rather unique style, the ASX itself is also listed on the exchange. It usually takes around six months to list on the exchange but can take as little as three months or as long as two years. For a company with a turnover of between 25-50 million it costs between four to seven percent of total funds raised to list on the ASX.
The largest sectors on the ASX tend to be financial services such as Australian and New Zealand Banking Group (ANZ Bank), Commonwealth Bank and the National Australia Bank (NAB) and commodities such as oil dependant company BHP Billiton and property trusts. These companies also comprise some of the ASX’s largest traded stocks.
Regulating ASX listed companies
The current Managing Director of the ASX is Robert Elstone, he was appointed to the position during mid-2006.
The ASX regulates all of the companies listed on the Exchange and has a stringent set of shareholder conduct guidelines that must be met before companies are able to list. The ASX requires all listed companies to provide share prospectuses, disclose information to shareholders (transparency) and adhere to corporate governance rules. Shareholders can report companies to the ASX via the complaints section of their website.
The ASX regulates those listed but due to conflict of interest and to ensure trade fairness the ASX is not able to regulate itself. The ASX is accountable to the Australian Securities and Investments Commission (ASIC).
