The NZX is warning local technology companies to wait and see before engaging with a new Nasdaq-like stock exchange being launched in Australia and aiming to be a “focus for the region”.
The exchange, to be known as the Asia Pacific Technology Exchange (APTEX), will begin operating later this year. Expected to be similar to Nasdaq in the United States and AIM in the United Kingdom, APTEX expects 20 companies to be listed on opening.
However, NZX products group manager Geoff Brown counsels New Zealand technology companies to look to the home market in the first instance.
He says it is very difficult to gain traction in new exchanges because of sometimes onerous listing requirements.
Brown says the NZX has identified the technology sector as being important and growing and in need of capital, but New Zealand companies should take a wait-and-see attitude to the new exchange.
Brown says in the past 10 years two local companies have listed on the US Nasdaq, for instance, and both subsequently delisted.
APTEX has been set up by a joint venture between NSX Limited, the owner and operator of the National Stock Exchange of Australia (NSXA), and Enterprise Pacific Limited.
Enterprise Pacific is a not-for-profit company formed under the Pacific Technology Corridor Business Plan to establish Australia’s equivalent of the Atlantic Technology Corridor and Silicon Valley.
Enterprise Pacific’s chairman, Geoff Mullins, says the whole of the Asia Pacific region is being targeted by APTEX to establish “a place where investors can look and know they are investing in genuine technologies, emerging or developed”.
“It’s as open to New Zealand as to Australian companies,” he says. “Particularly with CER (closer economic relations).”
He also refutes any suggestion that listing is onerous. He says the listing rules are on the website, requiring a minimum of 50 shareholders and two years trading and 25% of the shareholding must be public.
Mullins says intense planning is going on and APTEX will be talking with other markets, both major and alternative, around the world. Talks have not started in New Zealand yet, he says.
“We’d love to see one or two New Zealand companies come on and the investing market would be excited about that,” he says.
He says the project has received great support from both the new Australian federal government and from the New South Wales state government. MP Maxine McKew, who unseated Prime Minister John Howard in the Bennelong electorate last year, announced details of the exchange in Sydney last week.
Mullins says the project will create a virtual community and APTEX is seeking partnerships with international governments and organisations to help businesses globalise their markets and access capital.
He says with China boosting R&D investment by 19% a year and aiming for R&D of 2% of GDP, it makes sense for Australia and New Zealand to partner.
APTEX is an example of what is needed to attract capital to promote Australian innovation and technology, says McKew. The 21st century role of government is to support nation-building and Australia’s comparative advantage in technology, along with APTEX, is making a welcome contribution, she says.
NSXA CEO, Richard Symon, says APTEX will increase coverage of the small to medium business sector and will be a springboard for covering Asia Pacific markets.
“As a specialist exchange we expect APTEX to become a focus in the region for established technology businesses as well as those seeking to take innovation to the market place,” he says.
— Australian reporting by Sandra Rossi