Press Release

An Australian NASDAQ The World Today - Tuesday, March 21, 2000 12:55 MARK COLVIN: A NASDAQ down under. That will become a real possibility this afternoon when Australia's second stock market opens for business. The exchange is based in the New South Wales regional city of Newcastle, that will attract companies and investors from around Australia. The Chief Executive of the operation, Steven Pritchard, has been telling Mark Simkin he hopes the Newcastle exchange will become as successful as America's booming NASDAQ market. STEVEN PRITCHARD: The Newcastle Stock Exchange will work very similar to the Australian Stock Exchange. From an investor's point of view, there'll be no difference to dealing on the Newcastle Stock Exchange or the Australian Stock Exchange. Australia's relatively unique in the world in only having one national market. In the UK they've got the Alternative Investment Market which is run as part of the LSE, the London Stock Exchange, and that's been very successful. And, of course, in the US they've got NASDAQ which was - started off as a small operation, approximately in the 1970s, approximately 20, 25 years ago. And that's grown on the back of small businesses and technology companies. So overseas experience says that the concept should be quite successful in Australia, provided we can keep the quality of the companies that are listing on the Exchange to a high level. MARK SIMKIN: In that case, when you look at the DASDAQ index, it's got a reputation for high return but high risk. Is that what you're hoping to achieve? STEVEN PRITCHARD: When you get down to fundamentals, investment is all about the trade-off between return and risk, and that's really the key to all investment decisions, or the old fear versus greed. The securities that list on Newcastle will be no different to any other market in the world, that some of the securities, no doubt, will have a higher risk profile than others, and it's really up to the investor to decide what type of risk profile they're prepared to take against what returns they want before they decide to invest. MARK SIMKIN: Internet and technology stocks are really the flavour of the month on international stock exchanges at the moment. STEVEN PRITCHARD: Yes. MARK SIMKIN: Are you hoping to place any emphasis on those high-tech start-up companies? STEVEN PRITCHARD: We will look at listing those high-tech start-up companies, but it doesn't really matter to us whether they're a bio-technology stock or a boring engineering company, which is another one we've got in Newcastle wanting to list. MARK SIMKIN: Why would a company want to list on the Newcastle Stock Exchange and why would an investor out there want to invest in a company listed on the Newcastle Stock Exchange? STEVEN PRITCHARD: Well, what Newcastle is aiming to do is to provide a market for small, medium regional-based businesses whose securities presently can't trade on the ASX for a number of reasons. The most predominant one, of course, is the size of the company and the number of shareholders you're required to have to list on the ASX. But also there's a whole lot of other companies, because the way companies or entities, because of the way they're structured, can't presently list on the ASX. For example, there's a large number of co-operatives, building societies and credit unions who can't list on the ASX, but we're quite happy to have them listed on Newcastle. So what we see is that we're catering for a niche market here, plus a lot of investors would like to invest in these smaller stocks but they can't just get access to them. MARK SIMKIN: How optimistic are you about your growth prospects? STEVEN PRITCHARD: Well, we think we've got realistically achievable targets. Now, what we're saying is that we'd like to open with three or four stocks on the board in the next month to six weeks, which is - that's going to be achieved - and then we're saying that at the end of the first year we'd like to have about 40 stocks listed. You know, I can't see any reason that can't be achieved. And in year five we'd like to have about 250 stocks listed on the exchange. And when you put that into an international context, that brings the size of the exchange up round the size of the New Zealand Stock Exchange. MARK SIMKIN: When people think of Newcastle, they think of a traditional industrial centre. Is this part of a bigger plan to change the way Newcastle does business? STEVEN PRITCHARD: If you look at the successful sectors of the economy in the 21st century, I think you'll find that there are going to be financial services, telecommunications and pharmaceutical health care industries, and I would have thought that - and I hope that - you know, we've set the stock exchange up in Newcastle - I hope this is the development of a new financial services industry in the region. MARK COLVIN: Steven Pritchard of the Newcastle Stock Exchange, starting business today electronically.