The National Stock Exchange (NSX) officially opened on the Gold Coast in October this year, as part of its overall strategy to have a presence in regional growth areas. So far this presence includes the Sunshine Coast, Wollongong, Newcastle, and soon, Geelong in Victoria.
The NSX recognises that the growth of SMEs is increasingly important in regional economies and has created a regional exchange initiative to focus on the needs of regional business for growth capital and business solutions.
The NSX, operates markets capitalised at more than $1 billion and aims to have between 10 and 15 small to medium Gold Coast businesses listed over the next 12 months. With a proven track record in attracting regional business including over 50 Bendigo Bank Community Banks to their markets from every state and territory in Australia, they might just reach that aim.
Richard Symon, NSX’s CEO said this is the start of plugging what he described as a superannuation ‘cash drain’ in regional Australia. “On the Gold Coast for example, there are roughly 240,000 employees. At a $50,000 average wage, $20 million a week is flying out of the region with very little capacity to capture funds for local investment purposes. Investment back into a local region would support companies’ expansion, working capital and therefore employment. The ability for the fastest-growing sector of the economy – that’s small to medium sized enterprises – to capture that money is diminished by investment allocations which favour buying shares in the larger companies, property and overseas investments.”
Regional Exchanges
So what exactly is a Regional exchange? Regional exchanges operate as sub-markets of the National Stock Exchange. They are not licenced Stock Exchanges in their own right, but they do provide access to all the benefits and opportunities of the broader NSX market for regionally based businesses.
Regional exchanges have the advantage of creating a stock exchange presence within a region, without the considerable dollar investment or long lead times normally associated with establishing a separately licensed exchange. They can, therefore, start to offer solutions to regional businesses in a very short time frame.
Qualifying for a listing on the NSX is certainly less demanding than listing on the ASX. To list on the ASX for example, you must have a market capitalisation of $10 million or net tangible assets of $2m and at least 400 shareholders, compared to a market capitalisation of $500,000 for the NSX and a minimum of 50 shareholders
“If small businesses started acting like larger companies then listing on the NSX will provide that foundation for expansion,” says Symon. “The NSX can also be a stepping stone for many ASX aspiring companies to get up to speed on the management and governance disciplines of being a publicly listed company.”
NSX opens on the Gold Coast
As mentioned earlier, NSX officially launched its presence on the Gold Coast in October this year with its regional partner Business Growth GC. Adam Gallagher, Co-ordinator of Business Growth GC, wants to help businesses overcome two key challenges.
“Through the exchange we want to be able to help Gold Coast businesses meet the challenges of becoming investor ready, gaining the attention of investors and raising capital”.
With the Regional Exchange initiative, regional businesses are listed on both www.nsxa.com.au and through a customised regional exchange website i.e.
Gold Coast Exchange. With the assistance of local Brokers and Advisers, the local Exchange can be an effective mechanism for raising investor awareness and for channelling local investment into local companies.
Chris Evans, Managing Partner of Quivre and Associates, a local adviser, was quick to see the potential benefits for the region.
“The Gold Coast today is a vibrant city forming an integral part of the South East Queensland business community. Having a regional exchange connects successful companies with the broad range of local professional firms that provide listing advice and guidance, and introduces a means of tapping in to additional expansion capital or assisting with succession planning. With the successful launch of the NSX on the Gold Coast, there are already a number of organisations targeting a capital-raising listing in the near future”.
For business owners and operators, the benefits of listing are numerous. Not only does it provide easier access to capital, but it places an objective market value on your company, encourages employee commitment via share ownership schemes, increases a company’s ability to make acquisitions, heightens the company’s status with customers and suppliers and provides a succession exit strategy for company founders.
At the recent Gold Coast launch Symon concluded by saying “Regional exchanges act as a catalyst for focusing resources, advice and capital for the economic development of Regional Australia.”
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| Richard Symon, CEO NSX | l to r. Graham Teys, Chairman BusinessGrowth GC, Adam Gallagher, Co-ordinator BusinessGrowth GC, Richard Symon, CEO NSX |
