In 2016, the Australian Securities Exchange (ASX) has been said to have witnessed about 133 new listings (including forty new technology companies) against 42 on the Nasdaq. It has now been contested that with the listing requirements getting tighter, smaller tech companies with value below $US 3-4 billion find it difficult to bag an initial public offering in the United States. For such players, Australia and some parts of Asia proffer better opportunities. In the current scenario, US companies having a value ranging from $US100 million and $US200 million are generally seen to target listing on the ASX and other exchanges for a better prospect.Among many stock exchanges, ASX is considered to provide better opportunities given the regulated market scenario and exposure to global fronts given that a major portion of trading volume and capital is coming from overseas.
 
Changing Trend: It is also interesting to note that many big global sharks of the sector are facing headwinds these days given their vulnerable market positioning and better performance of smaller and value players. There has been a notable shift in investor thinking when it comes to tech stocks, though the recent slip in performance of the overall tech sector may not seem significant on paper. One of the reasons for the investor’s changing outlook is that a lot of value has been seen coming from the tech stocks globally, as investors started to demand more from companies overall. They generally look for progress towards commercial outcomes, and profitability trend for larger companies. Recently, Nasdaq technology index and technology stocks per se are seen to be sending up warning that the broader market may be getting ready for a sell-off. When tech companies and Nasdaq rose to new highs after Facebook earnings, they were soon abruptly reversed as the market echoed that the high levels have already been reached. Additionally, the recent results from the five biggest technology firms, Alphabet, Amazon, Apple, Facebook and Microsoft have indicated for a sluggish pace of growth.
 
Macro Environment:There is some uncertainty over policies in specific technology sectors (such as fintech) and the global market is heavily focused on data. Further, interest rate hikes are said to have an impact on how the market sees the tech sector stocks. However, with changing dynamics, Australia has been eyed for growth by many technology companies in segments such as fintech and medical devices finding support from varied set of parameters. For instance, fintech companies foresee growth at the back of Australia’s strong financial system and rapidly growing sector.
 
It would be worth watching how this tech ecosystem pans out in the near future.

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