There's More Than One Place To Buy Listed Shares

Sun Herald

Sunday January 30, 2005

John Kavanagh

John Kavanagh, editor of Personal Investor, finds there is competition among stock exchanges.

A NEW stock market opened for business in Australia this month. Australia Pacific Exchange (APX) kicked off on January 18 with the listing of Visionglow Global, a $20 million technology company operating in the field of photoluminescence.

The existence of another equity market may come as a surprise to many investors who assume that all listed public companies have their shares traded through the Australian Stock Exchange.

While the ASX is the dominant equity market provider in Australia, it is not the only one. Bendigo and Newcastle have exchanges and they have been joined by APX.

Operating stock exchanges is a business like any other (albeit highly regulated) and is open to competition. Rival exchanges exist to cater to companies that want to trade their shares but do not wish to comply with ASX listing rules.

The ASX is strict about reporting requirements, the minimum amount of capital on issue and the minimum number of shareholders. Companies might also get a cheaper deal on listing fees by going to one of the alternative exchanges.

APX was set up by a Melbourne broker, Austock, which has operated exempt markets since 1997. An exempt market is a share trading facility, sanctioned by the Australian Securities and Investments Commission, which allows for the trading of the stock of a company that would not satisfy ASX listing rules. The company might, for example, have restrictive ownership rules.

Austock has operated exempt markets for pharmaceutical company Sigma, fruit packager SPC Holdings, property syndicate manager MCS and Esanda debentures and notes.

To trade on the APX market you will have to set up an account with a participating broker and then contact your broker in the same way as if you were buying and selling ASX-listed stocks. So far the APX market's only participating broker is Austock.

Small, alternative equity markets have struggled over the years and the move to set up a new one is certainly courageous. The Bendigo Stock Exchange lists only 15 companies.

APX executive chairman Bill Bessemer says there is a role for alternative exchanges as a home for all the small, unloved stocks on the ASX.

He says 90 per cent of ASX trading is in the top 10 per cent of stocks. The vast majority get little or no attention.

APX hopes to change that.

Its website is www.apx.com.au.

In this month's Personal Investor magazine there are great ideas to kick-start your new year financial resolutions. See www.personalinvestor.com.au.

© 2005 Sun Herald

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