This article explores the reasons behind the shrinking number of companies on the Australian Securities Exchange (ASX) and the trend of Australian tech giants listing in the US. The author argues that while globalisation plays a role, it's Americanisation that is driving this exodus, highlighting the dominance of US tech growth stocks and the allure of listing in New York.
It’s no secret that the number of companies on the ASX is shrinking faster than your average packet of Tim Tams. In the past financial year,Altium, Boral and CSR are just a few of the great Australian companies we’ve lost this year, and arguably our greatest tech success, Canva, intends to list in the US next year, following the lead of Atlassian in 2015.for a combined 70 per cent of Gen Z and Millennial portfolios, with just 30 per cent allocated to Australian shares.
However, it doesn’t seem unreasonable that major companies founded in Australia should still call Australia home and list locally. It just requires concerted effort., which hit an all-time recently, might tempt prospective IPO’s away from the private markets, where all the fun is being had, but there remains a task to convince prospective IPOs who are considering US listings to stay on the home team.there is “no shortage of demand” from companies mulling floats.
Tom Cowan, of TDM Growth Partners, the firm which brought Guzman y Gomez to the public markets, is also a true patriot. “History would suggest that the ASX is a wonderful place to list fast-growing businesses and while there is always an enticing aspect to the US, the benefits of a local ASX listing far outweighs this,” says Cowan.
But there are a few tweaks that could make the ASX more attractive. The reality is that we can’t compete with America’s tech dominance. We should be playing to our strengths inA quick whip-round of my industry contacts produced an IPO Christmas list of iconic Australian companies investors would jump at, including Bunnings, Kmart, Cotton On, Visy, Hancock Prospecting, Snowy Hydro and Sydney Metro.
“We know we’re an outlier globally in not permitting dual-class listings, and it is something we could consider in close consultation with ASIC and the market,” says Posnett.Of course, there is always the opportunity to cut more red tape and make listing cheaper and even faster. The social credibility and eclat of being public needs to outweigh the burden of the extra paperwork and governance requirements.
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