The ASX launched its Australian rendition of the NASDAQ on Friday, with it anticipating the growing pool of money in superannuation to pull offshore enterprises towards listing on the local exchange.
The S&P/ASX All Technology Index (All Tech Index), started in partnership with S&P Dow Jones Indices will go live on Monday under the code XTX.
The new index holds ASX-listed companies in the technology sector, starting with 46 members holding a combined market cap of around $104 billion.
At the top of its constituents are accounting software provider Xero, share transfer company Computershare and buy now pay later giant Afterpay. Superannuation fund service provider Link Administration was also listed in the top 10.
At launch, the index has three New Zealand companies, two from the US and one Irish company.
Max Cunningham, executive general manager, listings and issuer services at the ASX commented he expects more foreign listings to come, adding one of the most important factors attracting overseas firms to the ASX is the local superannuation system.
“Given recent listings that we had in December and a very healthy pipeline for 2020, that part of the cohort is likely to rise,” Mr Cunningham said.
“Our superannuation pool is now touching US$2 trillion and has forecasted growth to $10 trillion by the middle of the next decade. That currently makes us the fourth-largest investable, pension pool in the world.
“And if demographics stay the way they are by mid-decade, we should be number two in the world for investable, pension funds globally, not per capita, mind you, but by total absolute dollar value.”
Currently on the ASX, there are more than 200 listed technology firms valued at almost $115 billion.
The index provides early entry to ASX-listed technology companies, with the floated adjusted minimum market capitalisation being $120 million, a few hundred million lower than the current qualifying value for the S&P/ASX 300.
It also does not have a set number of constituents; its makeup can change at each quarterly rebalance.
BetaShares is the first provider set to roll out an ETF tracking the index, a week and a half after its launch.
ASX chief executive and managing director Dominic Stevens said the index will enhance the profile and understanding of listed technology companies in Australia and increase opportunities for investors.
“We’ve seen tremendous growth in the number of technology companies listing on the ASX and the quality of their performance recently,” Mr Stevens said.
“Over the last three years, the annualised total return from the S&P/ASX 200 has been around 10 per cent, while the return from the new All Tech Index over the same period – it had existed – would have been over 20 per cent.
“The All Tech Index recognises the critical mass of technology companies listed on the ASX. It provides investors with an opportunity to see how the sector is tracking and gives them a benchmark to measure its performance.”
Mr Stevens added a vibrant technology sector is good for Australia.
“It helps drive economic growth, strengthens the relevance of our capital markets and encourages job creation and innovation onshore,” he said.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].