Listing and capital raising in Australia March 2017 Why Australia? - PowerPoint PPT Presentation

Listing and capital raising in Australia March 2017

Why Australia? 25 years of Gateway to global capital uninterrupted growth ~45% international investors* Low government debt Positioned in the world’s fastest growing region A long history of funding Robust regulatory and listing early stage environment companies 2 * Australian Bureau of Statistics, ABS 5232.0, Table 47, September Quarter 2016

Why Australia? Investment Fund Assets (US$b) United States $18,221 Luxembourg $3,843 Australia has Ireland $2,128 Asia’s largest France $1,917 pool of investable funds Germany $1,866 Australia $1,597 Singapore $1,525 UK $1,492 Japan $1,475 China $1,154 Hong Kong $880 To grow to $6 trillion by 2030 Source: Investment Company Institute, Austrade, Q2 2016 Source: Deloitte 3

ASX is a globally recognised market Market Capitalisation Rank Exchange (US$m) 1 CME Group Inc $53,666 2 Intercontinental Exchange Inc $46,174 3 Hong Kong Exchanges & Clearing $39,825 4 Deutsche Boerse AG $21,517 5 London Stock Exchange Group $16,956 6 Nasdaq OMX Group $15,220 7 BM&F BOVESPA SA $13,159 The world’s 8 Japan Exchange Group $10,874 9 th largest 9 ASX Ltd $9,862 exchange 10 CBOE Holdings Inc $8,236 by market 11 Singapore Exchange Ltd $7,300 capitalisation 12 Moscow Exchange MICEX-RTS $6,581 13 CETIP SA-Mercados Organizado $5,104 14 BATS Global Markets $4,415 15 TMX Group Ltd $4,278 4 Source: Bloomberg, 10 January 2017

ASX is a globally recognised market Size of stock markets in Asia-Pacific region (ex-Japan, US$b) China (7) $1,262 9th Australia (9) $1,056 Korea (10) $757 Taiwan (11) $600 By free-float market India (12) $509 capitalisation, ASX ranks Hong Kong (13) $509 3 rd in Asia Singapore (22) $213 9 th in the world Thailand (26) $134 Malaysia (27) $127 Indonesia (29) $123 Philippines (32) $71 New Zealand (36) $53 Source: S&P World By Numbers report, December 2016 5 Numbers in brackets show the country’s position globally

An active capital raising platform IPO Capital Raised by Exchange 2014-16 (US$m) 7 NYSE $111,402 Hong Kong $73,707 London Stock Exchange $55,357 Nasdaq $53,449 Consistently ranked Shanghai in the world’s top $39,390 equity markets for capital raising Tokyo $37,631 ASX $28,746 Shenzhen $23,411 Euronext Amsterdam $19,748 Deutsche Börse $18,328 Bolsa de Madrid $17,371 Mexican SE $13,133 6 Source: Dealogic, December 2016, figures include junior markets where applicable

An active capital raising platform Technology IPOs 2016 2016: 129 new listings ( 2015 : 126, 2014 : 104) #1 sector: ~25% of new listings Follow-On Capital Raised Initial Capital Raised and New Listings Number A$ m A$ m 350 $120,000 $35,000 New Listings $30,000 300 $100,000 $25,000 250 $80,000 $20,000 200 $60,000 $15,000 150 $40,000 $10,000 IPO Capital Raised 100 IPO Value Listed $20,000 $5,000 50 0 $- $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: ASX 7

A single board for companies from all industry sectors Breakdown of Listed Companies Utilities IT and Telcos Strongly represented by: 2% Consumer Discretionary & 11% Staples 12% Financials and Resources sectors Industrials & Small-cap and growth companies Materials (ex M&M) 10% Health Care 8% Proportion of Listed Companies Resources Real Estate (Energy + M&M) by Market Capitalisation (A$) 4% 43% Financials Total Listed Entities: 10% 30% 2,206 28% Market Capitalisation Utilities IT and Telcos 3% 6% 17% Consumer Discretionary & Industrials & Materials Staples 15% (ex M&M) 11% 11% 10% Health Care 6% Resources 4% (Energy + M&M) Real Estate 21% Market Cap: <$10m $10m-$50m $50m- $100m- $500m-$1b >$1b 8% $100m $500m A$1.8 trillion Financials 30% 8 Source: ASX, January 2017. Excludes suspended companies and those with $0 market capitalisation Excludes ETFs, retail and wholesale debt listings, entities with no GICS classification, stapled duplicates

ASX Industry Sectors 214 161 Health Care Energy companies companies 33 163 Financials Materials companies companies Metals & Mining 645 193 Information Technology companies companies 165 25 Telecommunication Industrials Services companies companies 177 29 Consumer Utilities Discretionary companies companies Consumer Staples 62 89 Real Estate companies companies 9 Source: ASX internal data, Bloomberg, January 2017

Global indices comparison ASX has outperformed its global peers through the “Asian Century” Global index performance since 2000 250 200 150 100 50 0 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 S&P/ASX 200 S&P 500 FTSE 100 Hang Seng FTSE EURO TOP 100 Nasdaq Composite Source: Bloomberg, 10 January 2017 10

Global indices comparison  ASX offers access to key indices at a relatively early stage versus global peers  Overall valuations match or exceed those found in other global markets Price/Sales P/E EV/EBITDA Minimum company size Index (forward) (forward) (forward) (total market cap)* S&P/ASX 200 US$520 million 2.1 16.5 10.3 S&P/ASX 300 2.1 16.5 10.3 US$223 million S&P/ASX 300 INFO TECH 3.6 22.3 14.8 S&P/ASX 300 NASDAQ COMPOSITE n/a 2.2 20.1 12.2 NASDAQ 100 US$4.5 billion 2.8 18.8 10.8 S&P 500 1.9 17.5 10.5 US$5.3 billion S&P 500 INFO TECH 3.6 17.3 10.1 S&P 500 FTSE 100 US$4.1 billion 1.2 14.7 8.3 HANG SENG 1.8 11.6 9.5 US$3.8 billion Source: Bloomberg, 12 January 2017 AUD/USD Exchange rate 0.7428 as at 25 November 2016 11 *Indicative values based on eligibility criteria or inclusions as at last rebalance, November 2016.

A growing Technology sector on ASX Average market cap of ASX listed technology stocks is $207m; median $40m Total ASX Listed Technology Companies Value of Technology Stocks by Sub-sector Market Cap: Other IT $39.3 billion Tech Companies: 190 200 7% 175 150 IT Services 36% Software 125 35% 100 75 50 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Internet Software & Services 22% Source: IRESS, Moelis & Company as at 1 st January 2017, GICS Information Technology sector Source: Morningstar DatAnalysis as at January 2017 12

A growing Technology sector on ASX Over 60 ASX Tech IPOs in the past 3 years Foreign tech companies ASX marketing iProperty initiatives acquisition (2016) Wisetech IPO (2016) Aconex IPO (2014) Freelancer IPO (2013) Xero listing (2012) 13

ASX is a vibrant market for large and small cap tech IPOs In 2015-16 the average market cap of a tech IPO on ASX was $161m with capital raised $54m Market Cap at IPO $974m $819m $542m $2.1bn $267m $480m $312m $218m $168m $169m $154m $105m $62m $71m $66m $81m Note: Market Cap figures above are in AUD as at date of first listing on ASX 14

Access a global network of investors Institutional Ownership S&P/ASX 200 Index RoW, 1% Asia, 8% Europe, 14% Australia, 55% North America, 23% Top Institutional Investors 15 Source: Orient Capital, February 2017.

Incremental investor access 51 New Zealand based companies are listed on ASX An independent survey of institutional investors finds that an ASX listing enables NZ companies to access an additional investment pool of A$241 billion, FIVE times the funds available to a solely NZX-listed company. 400 350 $377 billion 300 $307 250 billion $ billion 200 150 100 50 $66 billion 0 Total Funds Under Available to ASX-listed Available to NZX-listed Management NZ Companies NZ Companies 16 Source: Orient Capital

When can you IPO? ASX offers a main board IPO at an earlier stage than most other major markets A traditional financing cycle… VC, Private Equity, Mergers & Initial Public Offering & Exit Angels, FFF Strategic Alliances Revenue Seed Capital 3rd 2nd 1st Valley of Death Time Potential timing of an ASX IPO 17

IPO pricing study: ASX vs USA  Macquarie Graduate School of Management (MGSM) analysed IPOs of companies large enough for the S&P/ASX 200 but too small for S&P 500  Findings: Significant underpricing in NYSE and Nasdaq markets vs ASX IPO Underpricing – ASX vs US Listings 25% 20% 15% US US 20.3% 21.0% US US 19.07% 22.29% 10% ASX ASX 6.73% 8.67% 5% ASX ASX 8.3% 6.4% 0% First Traded Price 20th Day Closing Price Source: MGSM Sample period: Jan 2009 - Jun 2015 Stocks: 22 ASX + 22 US (matched) Underpricing = (Reference Price – Offer Price) / Offer Price 18

Listing rules & process 19

Initial listing requirements Tailored to growth companies Admission Criteria Minimum Requirement Number of shareholders Investors Amount 300 $2000 $1 million $500,000 Profit Test aggregated profit consolidated profit over past 3 years over last 12 months Company Size OR $4 million $15 million OR Assets Test Net Tangible Assets Market Capitalisation Free Float 20% 20