The S&P/ASX All Technology Index has been launched in Sydney providing technology companies listed on the Australian Stock Exchange greater market visibility.
Dubbed as the smaller version of the US NASDAQ Index and supported by US index provider S&P Dow Jones Indices, the All Technology Index will allow Australian and global investors to better track the growth of the Australian technology sector.
Minister for Industry, Science and Technology Karen Andrews said at the launch that the new index was the outcome of seven years of hard work and an "incredible milestone for Australia's technology sector".
It complements a growing number of venture funds in Australia , and strong levels of venture capital, providing an alternate source of finance for new and expanding technology companies.
Australian technology companies contribute $122 billion to the economy, with the potential to generate an additional $50 billion per year, Minister Andrews said.
According to an explanatory article published on the S&P Dow Jones Indices website, the implementation of the new All Tech reflects the substantial growth ASX-listed technology companies experienced in recent years, as their market capitalisation increased more than fivefold between 2014 and 2019, from $17 billion to $91 billion.
The article by senior director equity indices Michael Orzano details that to be included in the index companies have to fulfil certain 'investibility' criteria.
But in contrast to the current S&P/ASX 200 Information Technology Index, the new index will cover a range of technology sectors and subindustries (as defined by Global Industry Classification Standard; GICS). They include:
At the time of the launch the index listed 46 enterprises, of which the vast majority (80%) were from the information technology sector, with the remainder from communication services (15%), consumer discretionary (3%), and health care (2%).
The companies ranged in market cap from around $100 million to $13 billion, with the top enterprises comprising Xero Ltd, Computershare Ltd, Afterpay Ltd, REA Group Ltd, and Carsales.com Ltd (as of 28 February 2020).