ASX last week said the total amount of capital raised in the December half hit a record $90.3 billion. Mr Stevens said this bumper period for raising capital was helped by the sheer amount of money looking for returns, strong merger and acquisition activity, and the quantity of wealth being created in the technology sector. Ultra-low interest rates also meant investors had been more willing to back companies not expected to make a profit until well into the future.
If you look out to 2030, there will only be more technology companies, not less, and it will be a bigger section of the index
ASX CEO Dominic Stevens
Mr Stevens said some of these factors were turning, suggesting conditions may be “a bit frothy” and it was probably healthy there had been a slowdown in the markets for SPACs (special purpose acquisition vehicles), initial public offerings (IPOS), and Bitcoin .
Although boomtime conditions on capital markets would probably ease to more normal levels, he argued that in the longer-term, ASX was well-placed to benefit from an inevitable rise in technology companies as a force on global stock exchanges.
ASX says that between 2017 and 2021, it had 110 technology IPOs, trailing the Nasdaq, Japan Exchange Group, and New York Stock Exchange, but ahead of major exchanges in Singapore, London and Hong Kong.
“ASX, if you go back a long time, if you look at it in a global sense, it’s sort of a sharemarket for miners, banks, some retail. What I think the team has done here is actually diversify the offering of ASX,” Mr Stevens said.
“At the end of the day if you look out to 2030, there will only be more technology companies, not less, and it will be a bigger section of the index because that’s just the way the world’s going. To not actually focus on that would have been a mistake.”
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