This is largely in accordance with the size of the Australian economy, as measured by Gross Domestic Product (GDP). But much like
the size differential between the American and the Australian markets, the size of the ASX is dwarfed by that of the New York Stock Exchange (NYSE) that is more than 12 times larger in terms of market capitalisation. The ASX is currently trading on a 20.2 times Price Earnings (PE) multiple, compared to the long-term average 17.6 times PE multiple and compared to the current 17.8 times PE several of the NYSE. It also trades at a 4.2% Dividend yield, one of the highest of all global exchanges. Investors also benefit from franking credits, which increases the attractiveness of volatility. While there are about 2185 stocks listed on the Australian capital equity, the majority of the value is made up of the top 200 stocks by market capitalisation. Hence the market barometer is largely viewed as the ASX200 index (XJO) and is regarded as the most important Australian share market index because it serves as the benchmark for finance managers. Other well-known indices include the All Ordinaries Index, comprising the top 500 stocks by capitalisation, the Accumulation index, comprising the top 200 stocks and assumes dividends are continuously reinvested, and the individual sector indices, such as the ASX 200 financials or ASX 200 Materials. Of the 2185 stocks listed on the ASX, around 33% are junior metals and mining stocks by amount, yet the whole listed Materials industry accounts for just 15% of the ASX by indicator weight. In contrast, financials just account for 5% of the number of shares listed, yet is the largest industry in terms market capitalisation; accounting for 36% of the indicator. Stocks are classified into sectors according to their major business type. Initial and Secondary Market One of the vital aspects of global share markets is the ability for companies looking to list to raise capital via an Initial Public Offering (IPO) or for already listed companies to run further capital raisings (secondary capital). You can avail help from Australian Fund Managers to get a better clarity for this topic. Performance The chart below shows the performance of the Australian share market since the publication of the initial share price index in1938. During this period major planet, political and economic events have impacted and shaped the Australian market. Notably, the market is characterised by cyclicality and is subject to times of intense upward trajectory (Bull market) and sudden and violent down trends (crashes or Bear market). The most notable recent crash, the Global Financial Crisis (GFC), occurred in 2008 and saw the ASX200 retreat by c.50% over the calendar year. The ASX 200 is presently trading at around the 5850 mark, nearing its 5 year high. In the past 12 weeks, the ASX 200 has increased by averaging 11.5%; whereas the ASX 200 Accumulation Index, which includes reinvested dividends, has risen c.18%. Notice: This article is meant to provide general advice only, and has been prepared without taking account of your objectives, financial situation or needs, and therefore prior to acting on advice contained in this document you should think about its appropriateness having regard to your objectives, financial situation and needs. If any advice in this document relates to the acquisition or potential acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement for that product prior to making any decision.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
October 2019
|