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    Takeovers and a shrinking ASX.

    Hi Lately it seems like there is a new takeover offer for a listed ASX company almost every week. Whenever one of these takeovers succeeds it inevitably means that the target gets delisted and the pool of companies to invest in on the ASX gets smaller. At the moment there doesn't seem to be a stream of new listings to replace the ones that get taken out - just the occasional new one such as Digico or Gusman y Gomez. Does this mean the ASX could become less attractive as an investment option (especially for the big players)? Does the ASX need to try to attract new listings? Cheers, Carl

    Answer

    Hi Carl,

    We have to agree to a certain degree and it will be interesting to see how JHX’s takeover of US based AZEK unfolds because a number of  vocal sceptics believe its a stepping stone for the Australian board to cast off the local regulatory requirements and pay themselves even more! As a country we are at risk of being left behind by onerous regulatory demands, especially with Trump taking the reigns in the US and that’s before we consider their inept attempts at technological improvements. We agree with assistant Reserve Bank governor Brad Jones:

    • You wouldn’t put the ASX in charge of a Saturday morning Bunnings sausage sizzle!

    By definition there is room for improvement on a number  of levels, if not, ETFs with overseas stock exposure will become the vehicles of choice for local investors. With ASIC and the RBA “all over” the ASX we believe things will improve from here but it might feel slow at times.

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