ASX Ltd (ASX: ASX) wants to make the Australian Stock Exchange into a mini NASDAQ.
As you might be aware, the NASDAQ is a stock exchange in the US. It supposedly has better features and up-to-date offerings for clients, which is why tech companies like Facebook and Netflix were attracted to list there.
However, the NASDAQ generally attracts tech businesses that are quite large because of listing requirements and the pressure of being listed in the US.
The ASX sees an opportunity here, it's trying to attract those smaller tech growth shares that may want a different source of capital than venture capital, which is how it's attracting lots of tech onto the boards like Audinate Group Ltd (ASX: AD8), Tyro Payments Ltd (ASX: TYR), Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT), Pushpay Holdings Ltd (ASX: PPH), Life360 Inc (ASX: 360) and so on.
According to reporting by the Australian Financial Review, the next stage of the plan is going to see the launch of a new index next year in February called the S&P All Technology Index.
As you might expect, the ASX's famous WAAAX shares will be included, they are: WiseTech Global Ltd (ASX: WTC), Afterpay Touch Group Ltd (ASX: APT), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO). Most of the WAAAX CEOs will be there for the launch.
More investment for the sector will probably mean more liquidity for existing shares and will hopefully attract even more shares onto the ASX for us to pick from. Australia is a funny country with a small population but a very large and growing pension/superannuation system where a lot of money needs to find a home, so it would be good to have more non-Australian businesses to invest in.
Foolish takeaway
I'm sure ETF providers are very excited to create products relating to this new index. It would provide a very compelling investment when most large ASX index investments are weighted to banks and resource businesses.
