Australian Cash Equity Market March 2010

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Australian Cash Equity Market March 2010

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

ASX Equity Market Turnover

Average Total Market Capitalisation and Liquidity (1987 to 2009 Calendar Year)

Turnover A$B Average Mkt cap A$B Liquidity %

A $ B

P e r c e n t a g e

( %

)

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

0

10

20

30

40

50

60

70

80

90

100

110



Disclaimer: This is not intended to be fnancial product advice. To the extent permitted by law, ASX LimitedABN 98 008 624 691 and its related bodies corporate excludes all liability or any loss or damage arisingin any way including by way o negligence. This document is not a substitute or the Operating Rules o therelevant ASX entity and in the case o any inconsistency, the Operating Rules prevail.

© Copyright 2010 ASX Limited ABN 98 008 624 691. All rights reserved 2010. 10-03

Exchange Centre, 20 Bridge Street, Sydney NSW 2000 Telephone: 131 279 www.asx.com.au

For these products the market is operated by ASX Limited ACN 008 624 691



page 1

Market Overview

With a total market capitalisation o approximately A$1.5 trillion (December 2009), the ASX equity market is currently

ranked eighth largest in the world in terms o weighting in global indices (MSCI and S&P / Citi Global BMI).

The ollowing charts provide an overview o the Australian Cash Equity Market.

1.6% 1.7%

11.2%

15.6%

8.1%Health Care

Industrials 10.2%

Informat ion Technology 6.1%

43.7%

1.7%

Listed Companies by Industry: December 2009

There are 2,181 listed entities on ASX

Market Capitalisation by Industry: December 2009

3.6% 1.4%

12.4%

34.5%

Health Care 3.6%

Industrials 7.3%Informat ion Technology 1.0%

33.4%

2.9%



page 2

0

50

100

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350

0

5

10

15

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25

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

IPO Cap issued $B

Australian IPOs 1999 to 2009 Calendar Year

Mapping Ownership of ASX Listed EquityDomestic institutions, in total, own around 43%, foreign investors 40% & households 17%

* As at 31 Dec (Source: ABS Cat. No 5232.0)

Listed Equity

A$1,377bn

Pension Funds andInsurance Companies

A$350bn (25%)

HouseholdsA$230bn

(17%)

Private non-financialcorporations& Government

A$46bn (3%)

Other financialInstitutions*

A$196bn (14%)

Rest of the WorldA$556bn

(40%)

The IPO market in Australia recovered in late 2009 ater a dormant 18 month period.



Capital Raising

page 3

ASX is consistently among the global leaders in capital raising. The total capital raised was A$106bn in 2009.

ASX Capital Raising

2009 ($B) 2008 ($B)Primary Raisings

IPOs 7.5 2.5

Secondary Raisings*

Rits Issues 38.3 12.8

Pacements & SPPs 46.4 28.4

DRPs 11.4 15.6

Cas** 0.4 0.1

Options 0.1 0.4

Prospectus 0.3 0.2

Sta sare pans 1.7 2.4

Tota Raisins 106.1 62.5

Other Capital Changes

Sare Repurcases -2.1 -4.6

* Excudes equit issued as part o a sare fnanced M&A** Issue o u paid or part paid quoted securities due to te pament o a fna ca or ca on contributin/part paid securities.

0

20

40

60

80

100

120

Total Capital Raising

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

0

5

10

15

20

25

Primary Capital Raising

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20

40

60

80

100

120

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

Secondary Capital Raising

-14

-12

-10

-8

-6

-4

-2

0

Share Buybacks

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

Source: ASX. Data is caendar ear



page 4

Trading on ASX

Trade Count vs Average Trade Size

0

3,000,000

6,000,000

9,000,000

12,000,000

15,000,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

36,000

S e p 2 0 0 5

D e c 2 0 0 5

M a r 2 0 0 6

J u n e 2 0 0 6

S e p 2 0 0 6

D e c 2 0 0 6

M a r 2 0 0 7

J u n e 2 0 0 7

S e p 2 0 0 7

D e c 2 0 0 7

M a r 2 0 0 8

J u n e 2 0 0 8

S e p 2 0 0 8

D e c 2 0 0 8

M a r 2 0 0 9

J u n e 2 0 0 9

S e p 2 0 0 9

D e c 2 0 0 9

M a r 2 0 1 0

Note: Tota o Equities, Interest Rate Marets and Warrants

Note: Tota o Equities, Interest Rate Marets and Warrants

Average daily value has shown some signs o recovery rom the impact o the global fnancial crisis.

As with most global markets, ASX’s cash equity market has demonstrated the rising trade count and alling average

trade size pattern that is indicative o Direct Market Access (DMA) and Algorithmic trading.

Average Daily Value Total

A

$

B

D e c

2 0 0 3

u n e

2 0 0 4

D e c

2 0 0 4

u n e

2 0 0 5

D e c

2 0 0 5

u n e

2 0 0 6

D e c

2 0 0 6

u n e

2 0 0 7

D e c

2 0 0 7

u n e

2 0 0 8

D e c

2 0 0 8

u n e

2 0 0 9

D e c

2 0 0 9



page 5

0

1

2

3

4

5

6

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8

9

Value of ASX trades matched in CLOB by trade time: January – December 2009

Selected Notes:

CLOB - Central Limit Order Book where

Market Participants submit orders via ITS

(ASX’s cash equity trading system) to trade

Cash Market Products, Exchange TradedEquity Options, Tailor Made Combinations

and Standard Combinations.

Priority Crossing – Trading Participants

that act as buyer and seller in one

transaction can use the ASX System to

achieve time priority at the crossing price

i the trade is executed according to ASX’s

applicable Market Rules.

Crossing > special size (Special Crossing)

– Crossings with consideration equal to or

greater than A$1 million are reported to ITS.

Portfolio Special Crossing – A Special

Crossing in a portolio o Cash Market

Products which meets a number o criteria.

The Make Up of ASX Traded Value (by Condition Code): January – December 2009

N o r m a l C L O B M a t c h

O p e n i n g a u c t i o n m a t c h

C l o s i n g a u c t i o n m a t c h

C o m b o r e f C L O B

L a t e t r a d e ( L T )

P r i o r i t y & n o n - p r i o r i t y c r o s s i n g ( X T X T )

C o m b o c r o s s i n g r e f C L O B

L a t e c r o s s i n g ( L T X T )

C r o s s i n g > s p e c i a l s i z e ( S 1 X T )

P o r t f o l i o c r o s s i n g ( S X X T )

O ' s e a s c r o s s i n g ( O S X T )

P u t - t h r o u g h s p . s

i z e c r o s s ' g ( P 1 X T )

6 1 . 0

%

3 . 7

%

6 . 3

%

1 . 0

%

0 . 3

%

1 1 . 7

%

0 . 2

%

0 . 5

%

8 . 1

%

6 . 4

%

0 . 4

%

0 . 3

%

= 70.9% = 12.4% = 15.2%



page 6

Trading on ASX

Execution Costs Across Major Regional Exchanges

MARkET MARkET IMPACT (BP) COST O DElAy (BP) IMPlEMENTATION AvERAgE AgENCy

ShORTAll (BP) COMMISSION (BP)

Austraia 17 40 57 18

hon kon 21 37 58 16

Japan 21 11 32 9

korea 71 32 104 22

Sinapore 45 56 101 20

Taiwan 44 21 64 19

Source: Te Trade Q2 2009

Top 10 Stocks

STOCk ASX S&P/ASX 200 MARkET CAP AvERAgE AvERAgE # O AvERAgE

CODE INDEX WEIghT† ($BN) DAIly vAlUE‡ TRADES / DAy‡ TRADE SIzE‡

BhP Biiton BhP 12.7% $144.7 528,708,832 14,479 $36,515

Commonweat Ban CBA 7.5% $84.2 203,107,462 9,666 $21,013

Westpac WBC 6.6% $75.2 185,735,314 9,051 $20,520

Nationa Austraia Ban NAB 5.1% $58.0 191,376,964 9,135 $20,950

ANz ANz 5.1% $58.0 178,814,031 9,375 $19,074

Rio Tinto RIO 2.9% $45.4 209,435,343 10,494 $19,958

Testra TlS 3.3% $42.7 200,141,082 4,766 $41,998

Woodside Petroeum WPl 2.1% $35.3 97,903,578 7,602 $12,879

Wooworts WOW 3.0% $34.7 98,834,450 6,901 $14,321

Wesarmers WES 3.2% $31.4 88,072,895 6,611 $13,322

Source: IRESS † at 31 Dec 2009 ‡ Januar 2009 – December 2009

ASX ITS Co-location Hosting Solution

In December 2008, ASX launched a co-location hosting service or its Market Participants that essentially reduced to

microseconds the latency inherent in the ASX network. Co-location hosting allows Participants o the ASX to place their

trading equipment and assigned ITS Gateway machines within the same physical data centre as the ASX ITS primary

matching engine. This enables high speed market data and trade execution with network latency at globally competitivelevels.

The table above is indicative o where ASX sits compared to other regional exchanges in terms o execution costs.



page 7

ASX Market Micro-structure

Trading Hours

GMT + 10:00 (Eastern Standard Time)

The market goes through a number o phases on any trading day. The particular market phase determines the type o

action that may be taken or an order on ITS, which in turn aects how trading is conducted. The phases are currently

set as ollows:

TIME PhASE

7:00am – 10:00am Pre-Open

10:00am* Openin Sine Price Auction

10:00am – 4:00pm Norma Tradin

4:00pm – 4:10pm Pre CSPA

4:10pm – 4:12pm Cosin Sine Price Auction

4:12pm – 5:00pm Adjust

5:00pm – 6:50pm Adjust ON

6:50pm – 6:59pm Pure Orders

6:59pm – 7:00pm Sstem Maintenance

7:00pm – 7:30pm Cose

7:30pm – 2:25am Sstem Unaaiabe

2:25am – 7:00am Cose

* Random Openin, pease reer to Mornin Auction section beow

Opening and Closing Auctions

The opening and closing price or a security is determined by a our step approach involving the use o conditional

decision rules. The same auction is used or opening and closing trading, IPOs and resuming trading ater halts or

suspensions. The our steps work as ollows:• Using all orders in the order book, the system determines the cumulative buy and sell quantities or each side o the

book and then calculate the maximum executable volume (MEV) at each price level

• The system establishes the minimum surplus i.e. the price level where unflled volume is at a minimum

• The system determines whether the majority o market pressure is on the buying or the selling side

• The system determines the latest reerence price, usually the last price in trading or the previous day and i needed

a comparison between the reerence price and the auction price.

Morning Auction

The morning auction is split into groups to allow traders time to eectively manage their orders during the opening o

trade. The opening rotation is split into fve groups as ollows:

Group 1 10:00:00 am +/- 15 secs A-B e.g. ANZ, BHPGroup 2 10:02:15 am +/- 15 secs C-F e.g. CPU, DJS, FXJ

Group 3 10:04:30 am +/- 15 secs G-M e.g. GPT, KYC, LNN

Group 4 10:06:45 am +/- 15 secs N-R e.g. QAN

Group 5 10:09:00 am +/- 15 secs S-Z e.g. TLS

Main Order Types Offered by ASX

• Limit (LMT) – A Limit Order is entered as a defned price, the order will not execute at any other price

• Market (MKT) – A Market Order does not have a price limit and is traded at the price available in the market

• Market-To-Limit (MTL) – A Market-to-Limit order is a market order that converts to a limit price equal to the current

best opposing price

• Best-Limit (BST) – A Best Order is priority queued as a limit order at the current best bid or ask on the same side

o the market



page 8

• Short Sell (SHL) – Covered Short Selling is permitted under the Corporations Act. There are also special

arrangements or Market Makers under certain circumstances. For urther details please contact ASX in

conjunction with the order types there are also several validity attributes:

– FoK: Fill or Kill, the order is cancelled i all the quantity cannot be executed immediately

– FaK: Fill and Kill, fll the order now as ar as possible then cancel the rest

– Day: Expire at the end o the day

– Exp: Expire at the instrument’s expiration date

– Date: Expire ater a certain amount o calendar days

– GTC: Good till Cancelled, expire at the maximum allowed time or that particular instrument type

For more inormation, visit www.asx.com.au/asxorders

Crossings

On-Market Crossings

ASX allows Priority Crossings where a Trading Participants acts as buyer and seller in one transaction. The Trading

Participant can use the ASX System to achieve time priority at the crossing price i the trade is executed according toASX’s applicable Market Rules.

Off-Market Specials

A Block Special Crossing (BSC) is a crossing transaction that meets certain value conditions and thereore can be

conducted o-market and reported back to the market as an o-market trade (requirements are set out in the relevant

ASX Market Rules Section 18 and Rule 22.3). A Block Special Crossing may be executed in all products, however

dierent rules apply or dierent products. Block Special Crossings can currently be reported at any negotiated price.

Facilitation

The current threshold or these crossings is $1 million or all equity securities. This year, ASX intends to introduce a

new three tier block special crossing system based on the stock’s liquidity. For urther details contact ASX.

O-Market Specials that meet a urther minimum value requirement can have their reporting to the market delayed.

One side o these trades must be acilitated as principal by a broker. The minimum consideration or this transaction

is between $2 and $15 million depending on the category o security. The Trading Participant must immediately advise

ASX Market Control and report the BSC in conjunction with S1 condition code not later than 15 minutes prior to the

scheduled commencement o Open Session State on the next Trading Day i the trade is eected beore 1:00pm on

the previous Trading Day; or not later than 1:00pm on the next Trading Day i the trade is eected ater 1:00pm on

the previous Trading Day.

Portfolio Crossings

Portolio Special Crossings are a type o Block Special Crossing and allow a basket o securities to be traded together

o-market i they meet certain minimum value and number o securities requirements. Portolio Special Crossings

enable you to trade an entire portolio and can potentially have their reporting to the market delayed.

Price Step (Tick Size)

The highly granulated ASX tick sizes oer reduced market impact or dealing at by encouraging small market spreads.

SECURITy TyPE PRICE RANgE PRICE STEPS

Equities (incudes Equities 0.1 cent – 9.9 cents 0.1 cent

and ETs except Specia 10.0 cents – 199.5 cents 0.5 cent

Equit Securities) $2.00 and oer 1 cent

NUMBER O NUMBER O

PRICE RANgE PRICE STEP EQUITy SECURITIES EQUITy SECURITIES (%)0.1 cents – 9.9 cents $0.001 821 41.0%

10 cents – 199.5 cents $0.005 916 45.7%

$2.00 – $99,999,990 $0.010 266 13.3%



About ASX

As one o the world’s top-10 listed exchange groups, measured by its market capitalisation, the ASX

Group was created through the merger o the Australian Stock Exchange and the Sydney Futures

Exchange. The ASX Group operates under the brand Australian Securities Exchange.

The Australian Securities Exchange spans the markets or corporate control, capital ormation and pricediscovery and unctions as an operator, supervisor, central counterparty clearer and payments system

acilitator.

The diverse domestic and international customer base o the Australian Securities Exchange includes

issuers o a variety o listed securities, corporates, investment banks, trading banks, und managers,

hedge unds, commodity trading advisers and proprietary and retail traders.

More inormation on ASX can be ound on our website www.asx.com.au

Further information

Richard Murphy General Manager, Equity markets

+61 2 9227 0720

[email protected]

Andrew Musgrave Regional Manager, Asia

+61 2 9227 0211

[email protected]

James Keeley Regional Manager, Europe

+44 203 009 3375

[email protected]

David Mitchell Regional Manager, North America

+1 312 788 3363

[email protected]



Exchange Centre, 20 Bridge Street, Sydney NSW 2000. Telephone: 131 279 www.asx.com.au

Australian Cash Equity Market March 2010

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