2004 Market Highlights

This was accompanied by a number of other indications of a buoyant and active market. There were a large number of new listings this year, and also strong secondary capital raisings by listed companies. As well as the increased activity across the equities, options and warrants markets, there was other, perhaps less obvious indications of increased engagement. For example, there were high attendance levels at ASX investor education seminars throughout the year. 

The ASX share ownership study carried out a year ago confirmed that Australian retail investors were continuing to grow their portfolios.  While overall levels of ownership remained fairly static at 51 percent of the adult population, the number of stocks in the average portfolio, and its value, increased. Analysis of the late-2004 ASX share ownership study is already underway and the findings will be released early in calendar year 2005. 

Equities
28 October 2004 saw the breaking of a four-year record for the most equities trades in a single day, with more than 110,600 recorded. Then 30 November recorded another substantial advance on this, resulting in 117,141 transactions - the busiest equities trading day witnessed on ASX.

November 2004 featured more than two million trades.  This was again a four-year high, with the previous record of 1.9 million occurring in March 2000.  It was also the busiest month in terms of the value of equities transactions, seeing $71.5 billion traded during the month.

Options
The options market continued to grow, volume of contracts increasing around 20 percent on 2003 figures. On 25 November ASX experienced a record for options trading activity when 231,112 contracts were traded over the day.

The fastest growing contract in 2004 was S&P/ASX 200 Index Options (XJO), with volume up 27 percent over 2003.  Index options allow investors and funds to implement a view on broad market directions rather than on individual stocks, and are cash-settled.

New Listings (IPOs)
The growth in the number of companies listing on ASX continued through 2004 with 202 listings on ASX, raising $14.6 Billion.  The busiest single industry in terms of IPOs has been the mining and exploration industry, which provided 66 new listings during the year. The largest IPOs in terms of capital raised were:

• ConnectEast Group $616 million ($1.2 billion once fully paid)
• Babcock and Brown Limited $550 million
• Tishman Speyer Office Fund $527 million
• Hastings Diversified Utilities Fund $379 million
• Australian Onshore Energy Fund $300 million

There was also a strong IPO representation in the listed managed investments (LMIs) sector.

• LMIs accounted for more than $107B in capitalised value (up from $74B in 2003 and $62B in 2002).  They also accounted for more than 11 percent of the total capitalised equity value listed on ASX - an increase of one percent in share since the commencement of the financial year.
  
• The breadth and variety of LMIs now covers Exchange Traded Funds (ETFs), Pooled Development Funds (PDFs) and Absolute Return Funds (ARFs or Hedge Funds) in addition to LPTs, LICs and Infrastructure funds.

Warrant Market
The warrant market continued to develop in 2004 with rising trading levels and new products coming to the market including; self-funding instalments, knock-out warrants, and the re-invention of capital protected warrants. 

At the end of December 2004:

• Warrants turnover value was $3.7B, up from $2.5B in 2003, a 48 percent increase.
• The number of warrant series grew to approximately 2,000 (up from 1,200 in December 2003)
• Instalments recorded a new high of $351 million in turnover and a new high of 1,153 instalments on issue.  Instalments account for 75 percent of total warrant market value and nearly 60 percent of total warrants on issue.

Interest Rate Market
37 new securities were issued in 2004 with value of $4.1 billion.  This takes the total number of securities to 121.  The three largest listings were:

• PERLS II Trust PCBPA quoted: 7 Jan, $750m
• Santos Limited STOPB, 5 Oct 2004 $500m
• Macquarie Airports TICkETS MAZPA, 22 Dec 2004, $465m

ASX Investor Education
More than 4,500 investors attended ASX classes in 2004. Classes range from beginner through to advanced covering shares, options, warrants, investing overseas and investing for income.

The online classes continued to grow in popularity with around 5,000 people accessing them each month.  There are plans for a significant upgrade to www.asx.com.au early in 2005 with a new look and feel and navigation structure being implemented.

Record participation was achieved for both the Schools and Public Sharemarket Games with more than 110,000 Australians in total registering to play. The Games are designed to simulate real sharemarket conditions as participants buy and sell shares online using a hypothetical $50,000.

Registration is free. Dates for the next round of Games are as follows:

• ASX Public Game – Registrations open 31 January and trading commences on 24 February (16 week Game)
• ASX Schools Game – Registrations open 7 February and trading commences on 9 March (10 week Game)

After the successful introduction on the ASX Regional Program in 2003, ASX and Telstra Country Wide were joined by co-sponsor CommSec in 2004/2005.  In total, 1140 people were reached across 22 regional locations throughout 2004 and will be rolled out to another 24 locations in regional Australia by June 2005.  This initiative provides face-to-face sharemarket education to regional centres throughout Australia.