All about investment

The principal stock exchange in Australia is no less than the Australian Stock Exchange or ASX. Tracing its roots as far back as 1861, ASX had its humble beginnings on Australia’s different states where the premier exchanges took place.

Manual trading is already a thing of the past with the establishment of Stock Exchange Automated Trading System or SEATS. When it took over, the trading system was transformed into a full-digital one. The exchange is also a public-listed company.

In December 2006, the Australian Stock Exchange merged with the Sydney Futures Exchange (SFE) which is a futures and options exchange that renders derivatives (the 10th largest of its kind in the world) in commodities, equities, currencies and interest rates. The result of two giant entities combining is the creation of the Australian Securities Exchange which is believed to be the ninth largest listed exchange in the world.

If market capitalizations will be chiefly considered, then Australia and New Zealand Banking Group (the third largest bank in Australia), BHP Billiton (the world’s largest mining company), Commonwealth Bank of Australia (the second largest in the country and with existing businesses with its neighbor, New Zealand as well as in Asia and far away United Kingdom), National Australia Bank (the largest bank as well as the largest financial institution in the country), Rio Tinto (the largest coal mining company in the world and one of the largest multinational mining companies as well) and Telstra Corporation (the largest telecommunications and media provider in Australia) are inarguably the names behind the biggest stocks traded on the ASX.

Financial services (composing 34% of the sector), commodities (20%) and listed property trusts (10%) were the top three largest sectors by market cap at the end of 2006.

The major indexes that are quoted on a periodical basis total to four and they are All Ordinaries Index (almost entirely has the common shares found in the Australian Stock Exchange that makes it the oldest index of shares in Australia), the S&P/ASX 200 (a list of the top 200 shares in the ASX), the ASX 100 and the ASX 50 (a list of the top 50 shares in the ASX). ASX 200 and the All Words indices are the most prevalent ones and which frequently being featured on news item. Investors set their focus on these indices since these two are excellent indicators of the direction where the market will be heading that’s why they are also deemed as benchmark indices. Don’t be surprised if you locate ASX on its own exchange since it is listed there and can actually be found under the code, well, guess what? Under ASX (there is a three-letter code given for each stock listed.

The shares owned by ASX, since it is a publicly-listed company as mentioned earlier, are traded on the ASX itself. Individual holdings are also limited to a small chunk or part of the company since it is indicated in the corporation’s constitution. The Australian Securities and Investments Commission regulate ASX since it cannot conduct the regulation on its own self. Still, it is ASX that regulates the companies listed on it.

Robert Elstone is the present ASX Managing Director (he was the CEO of SFE before the merging occurred).

Paul Adams 1st , has been associated with Australian Stock Exchange in Australia.

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