Today we are publishing yet another article on the world's major exchanges. This time, we are going to write about an exchange from one of the world's most exotic regions – the Australian Securities Exchange, or the ASX.
The ASX's Place in the Global Economy
The ASX is one of the world's most influential exchanges. It is in the world's top twenty exchanges by total market cap ($1.3T*), while the number of its listed companies (2100) places it in the top ten. It is also the undisputed leader in its quite large geographical region – Australia and Oceania.
Despite there being quite a number of companies listed on the ASX, their names would say little to most Russians. The largest of these companies are mining companies and banks: the Commonwealth Bank of Australia, BHP Billiton, Westpac Banking, Rio Tinto, the Australia and New Zealand Banking Group, and so on. However, many Russians would still recognize the first two letters in BHP. They stand for Broken Hill, the famous mining town founded in 1883 and known in Russia thanks to the Australian beer brand of the same name.
Since Britain saw Australia as a treasure trove of natural resources from the very beginning (which were unfortunately often gained through prisoners' forced labor), it caught the big business' eye quite quickly. Several major exchanges were opened on the continent in the 19th century, the first one having been opened in Melbourne in 1861. At that time, Australia was still a British colony, as it only became a unified independent state in 1901.
In 1937 the country's six main exchanges (in Perth, Melbourne, Adelaide, Sydney, Hobart, and Brisbane) formed the Australian Associated Stock Exchanges. They established unified rules for trading on the exchanges, brokering, the amounts they could take as commissions, and so on. The exchanges continued on their trend towards integration since then. The latest merger occurred in 2006, when the ASX was officially born in its modern incarnation.
What an investor should keep in mind
The ASX is not as popular with online brokers as the NYSE, the LSE, or the NASDAQ, but most of the major brokers still provide access to it. Obviously, the broker must provide direct market access, or DMA, to the exchange, rather than simply offering contracts for difference, or CFDs. EXANTE is one of the brokers that gives DMA to the ASX.
The full list of companies trading on the ASX can be seen on the Stock Screener service at finance.google.com (pick “Australia” in the first box, and “Australian Securities Exchange (ASX)” in the second). Let us see which companies hold the first place in this year according to various criteria. We shall convert all the data we are going to give to US dollars.
The first two places by market capitalization are held by the Commonwealth Bank of Australia (ticker symbol CBA, market cap $97B*) and the BHP Billiton mining company (ticker symbol BHP, market cap $89B.) Many companies showed an outstanding price increase this year. They are Prospect Resources (ticker symbol PSC, market cap $56M*, 52-week price increase 1433%), Global Geoscience (ticker symbol GSC, market cap $48M, 52-week price increase 1400%), and Resapp Health (ticker symbol RAP, market cap $214M, 52-week price increase 1384%.) However, Resapp Health is the only one of these companies to successfully make it to the market for the first time, while the other two are only recovering from the crisis that impacted the entire mining industry. The first place by 5-year earnings increase is held by the Bellamy's Australia food company with a significant lead (ticker symbol BAL, market cap $889M, earnings increase 273%.)
There are no terribly expensive shares on the ASX. The most expensive ones right now belong to the Metal Securities Australia exchange-traded fund (ETF) with the ticker symbol GOLD and a market cap of $387M. Their shares cost $119, and in a day 5,600 of their shares are sold on average. The exchange's most popular shares belong to the Telstra telecommunications company (ticker symbol TLS, market cap $47B.) Their shares cost only $3.8 each, but around 30M of them are sold each day.
The ASX's working hours are 2:00 to 8:00 Moscow time (10:00 to 16:00 Sydney time.) Commissions with online brokers working with the ASX are usually a percentage of the amount being traded, and are usually around 0.1%. The minimum commission is usually around a few dollars. With EXANTE, the commission is 0.15% of the amount being traded, and there is no minimum commission.
* The letters stand for large numbers. B stands for billions, M stands for millions. The $ sign stands for US dollars (not to be confused with Australian dollars.)