The rapidly growing Australian technology sector today gains unprecedented recognition, with the Australian Stock Exchange (ASE) launching its first technology index.
The new All Technology Index will initially track the stockmarket performance of some 46 tech companies that between them have a combined market capitalisation of more than $100 billion.
The ASX notes that there are now more than 200 listed technology companies on the ASX, valued at about $115 billion, Though why more of them haven’t made it to the new index hasn’t been explained – perhaps many don’t generate enough trading.
However, ASX MD Dominic Stevens certainly seems to recognise the growing importance of technology Down Under.
Announcing the new development at the weekend, he said : “Technology plays an increasingly important role in our lives. ASX will continue to develop the listed technology sector to provide companies with capital to grow and investors with access to exciting opportunities.”
He noted that over the last three years, the annualised return from the traditional ASX 200 listings has been around 10 percent, while the return from the new All Tech Index over the same period – if it had existed –would have been more than 20 percent.
Industry Minister Karen Andrews was quick to applaud the ASX move. “In a little over five years, there have been more than 100 ASX Tech initial public offerings – in 2019, seven of the 10 highest performing stocks were technology companies,” Andrews said.
Stevens noted: “The All Tech Index recognises the critical mass of technology companies listed on ASX. It provides investors with an opportunity to see how the sector is tracking and gives them a benchmark to measure its performance.”
Of the 46 companies on the All Tech Index, he pointed out, 40 are Australian, three hail from New Zealand, two from the US and one from Ireland. Many of the companies included in the All Tech Index started as small caps and have grown into billion-dollar outfits, Stevens said.
The top 10 by valuation are Xero, Computershare, AfterPay, REA Group, and Altium, followed by Carsales, WiseTech, Link Group, NextDC and Appen.
CDN notes there are some oddities in the full 46 listings – for instance Computershare, despite its moniker, appears to have little to do with computers apart from probably having some in its offices – indeed, it brands itself as a dispenser of “corporate trust, stock transfer and employee share plan services”.
A note on the ASX Web site listed the eligible categories for its new tech index as: information technology; consumer electronics; Internet and direct marketing; inter-active media; and healthcare technology – nothing much there about corporate trusts and employee share plans.
From tomorrow CDN will be tracking the top performers in our page 4 stockmarket report, until now restricted to US Nasdaq listings (which have included one Australian company, Telstra – which didn’t make the ASX list).
