Investment activity steps up with June numbers proving solid for the ASX
The ASX released its monthly report this morning and June was a strong month to cap off the financial year.
Investors took to the market in droves, making 32.4 million trades – over 8 million more than June 2018. In the last 12 months they made almost 360 million trades – up from 292.5 million last financial year.
The total trade volume equated to $124 billion in June and $1.38 trillion in FY19, both figures a 12 per cent improvement from the previous corresponding periods.
Companies raised $7.3 billion in capital compared to $4.6 billion raised in June 2018 – a 60 per cent improvement. On a financial year basis, 2018-19 was an improvement as well, with $86 billion raised – 5 per cent more than 2017-18.
June’s figures were a significant improvement over May’s figures, where only $5 billion in total capital was raised. It would appear a run of successful IPOs in June helped, including betting company PointsBet (ASX:PBH) and fintech Prospa (ASX:PGL).
Stockhead contacted the ASX for comment this morning. While they were unwilling to make comprehensive comments beyond this morning’s release, a spokesperson agreed with the categorisation of June as “solid” for the bourse.
One of the more interesting figures to note is the ASX’s compliance activities. June 2019 witnessed higher activity than in June 2018. This included twice as many aware queries and eight more continuous disclosure queries.
Yet, across the 2019 financial year activity was mostly down with the exception of an increase in suspensions from 532 to 553. But there were 30 per cent less “price queries” and 14 per cent less aware queries.
China-based companies have posed some problems for the ASX. The exchange delisted Sunbridge Group (ASX:SBB) in June after several breaches of listing rules. These included directors trade reporting, annual report lodging as well as concerns about getting money out of China (which was why the company couldn’t lodge reports).
The majority of companies delisted in June were due to mergers, acquisitions or the “3-year suspension rule”. But Fortune Asia (ASX:FYA) suffered the axe in May and six were delisted in the 2018 calendar year. The ASX went so far as to tell the ABC in February that China was not a target market.
Even Dongfang Group (ASX:DFM), which is one of the success stories among ASX-listed Chinese companies, is currently suspended. Dongfang currently lacks a proper quorum for its board required under Australian law (three directors with at least two based in Australia). It voluntarily suspended itself three weeks ago.
The ASX is making preparations to replace its CHESS system with a new clearing system, which will be able to be used in a blockchain mode. It will be tested early next year and go public the year after that. The ASX will be pioneers among stockmarkets when this occurs.
Last month, the ASX visited the US to pitch local tech firms, aspiring to go public, to choose the Aussie bourse over the NASDAQ. A few weeks prior, the ASX welcomed Life360 (ASX:360) to the boards and the Silicon Valley export was on the expert panels at the ASX US IPO events.
The ASX released a video of the event on YouTube earlier this week.