One of the relatively new stock exchanges on the whole world is the Australian Securities Exchange (ASX). It was established only in 1987.
Before its inception, Australian stocks were traded on six different markets. Each major city in the country had its own stock exchange. The first among these was established in Melbourne in 1861. These stocks were traded in three different ways: verbal auction, chalk system and digital trading.
The primitive trading system, which was through verbal auction, had a person calling out stock names for bidding. Later, in 1969, this system was replaced by the chalk system because of the increase in trading volume. During this year, there was a boom in the mining industry, increasing stocks, making the verbal auction inefficient and inapplicable. Chalkies would jot down buy and sell orders of stocks on chalkboards.
In 1987, when the Australian Stock Exchange was formed, trade was done on digital trading platforms. It was known as SEATS or the Stock Exchange Automated Trading System. Due to this system, brokerage fees, up to today, are very low.
Currently the ASX is a publicly listed company. Before its demutualization in 1996, it was owned by stockbrokers. On December 2006, the ASX saw a merger from the Sydney Features Exchange and the Australian Stock Exchange.
As of 2007, ASX is recorded as the 8th largest stock exchange in the world. Around 100, 000 trades take place daily on the exchange. The largest stock registered on ASX is the BHP Billiton.
In 2004, the company, known as the mining giant in the whole world, had a total market capitalization of 6.6%. Currently, it is still the leading producer in diamonds, iron, coal, bauxite and petroleum.
Trading hours are not very long. The exchange opens at 10AM and ends at 4PM Sydney time. Stocks are not opened simultaneously to ensure that traders do not time the opening transactions. During the first ten minutes, the sectors are opened randomly.
Although the ASX can regulate companies listed under it, it cannot regulate itself. The Australian Securities and Investments Commission or ASIC is responsible for regulating the ASX.
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