National Stock Exchange of Australia eyes South-east Asia for listings, Singapore for capital

Australia’s second Tier 1 equity exchange, the National Stock Exchange of Australia (NSX), is expanding its horizons beyond its home market, targeting growth in South-east Asia and other overseas markets. NSX’s chief executive, Max Cunningham, revealed the exchange’s ambitions to The Business Times, as private capital puts pressure on public listings globally.

Cunningham highlighted South-east Asia, New Zealand, and Canada as potential markets for new listings, while Singapore is seen as a potential source of capital. He explained that market makers for alternative trading venues in the region have gravitated towards Singapore and Hong Kong, with a significant capital base from Asia and North America.

The move comes as public markets in Australia and other countries face challenges from the abundance of private capital. This pressure has led to several companies moving towards going private, as seen with four constituents of the Australian Securities Exchange’s (ASX) top 200 disappearing from the bourse within weeks.

Cunningham attributed the trend to macroeconomic conditions, interest rates, and a deep pool of private capital, which provides companies with an alternative route to fund growth without going public. He also noted the consolidation in the share registry sector, with several significant players moving to private ownership.

Singapore's capital has played a role in this trend, as evidenced by the take-private of National Storage Reit – Australia and New Zealand’s largest self-storage owner-operator – by GIC and Brookfield for roughly A$6.7 billion. Cunningham also pointed to the growing regulatory environment as a factor compounding the pressure on public listings, which is exacerbated by the rapid growth of passive investing through exchange-traded funds.

NSX is positioning itself as the alternative venue for small and mid-cap companies in the region, offering lower fees and a lighter-touch listing regime. Cunningham emphasized that this approach is aimed at smaller companies still considering public listings. The exchange has stripped out much of the regulatory cost associated with listing, setting a lower entry path in terms of market cap and asset requirements.

Beyond lower listing hurdles, NSX is focusing on revitalizing the small to mid-cap segment by providing active ecosystem support. This includes ASX’s research coverage scheme, which was introduced in 2012 to increase interest in small and mid-cap stocks and has since been established as a permanent program. Singapore has also taken a broader approach, deploying capital through the Equity Market Development Programme and strengthening research coverage through the Grant for Equity Market Singapore scheme.