Today [29 July] the Australasian Lawyer has a post detailing a recent report by Baker & McKenzie that:
“cross border IPOs in the Asia Pacific region have increased by 75 per cent in the first half of this year.”
Wow, Capital Markets and Corporate teams across the Region have really struggled since the GFC and seen a lot of layoffs in their teams so this must be music to their ears!
But what about Australia?
Well, it appears the news here is not so good. According to David Holland, head of Baker & McKenzie Corporate Practice in Australia:
“Australia didn’t see much activity and the regional boom is unlikely to have any significant effect on the Australian market specifically”.
Sorry but this is not acceptable.
Australia not only has a robust principal stock exchange in the ASX, but we can also offer traditionally family run Asian companies access to a very friendly IPO forum in form of the National Stock Exchange (NSX) of Australia, pitched as being:
Listing and reporting rules for both are pitched as being much less onerous than is the case with other stock exchanges across the region.
So, why are we missing the boat here?
To my mind the answer to this question is this:-
Australian law firms and government bodies are failing in their duty to sell Australian law as a viable forum for international business.
Yes we missed the boat on selling Australian law as the governing law for international agreements – the English and Americans (New York) beat us at to that. But in this case we have a very distinct advantage that we are simply not pursuing or pushing.
To be clear, we’ve known for some time that Asian governments (particularly China) have been advocating for their domestic companies to list overseas in order to show transparency. We’ve known for a long time that control remains a massive issue for Asian companies (particularly family run businesses) and IPOs are, as their name suggests, capital raising exercises.
And what have we done about it?
Pretty much nothing. Few, if any roadshows. The occasional newsletter. Maybe the odd seminar.
In short, nothing.
Looking for a silver lining?
Luckily for us there is one in an ABC article from February of this year “China-based companies to list on ASX to avoid Asian stock market costs and free float requirements“, which points out that:
“Smaller Chinese companies are looking to list on Australian stock market operator the ASX to avoid the cost and free float requirements of larger Asian exchanges.”
All we need to do now is get out there and spread the message!