https://www.afr.com/technology/revealed-xero-to-head-100b-aussie-nasdaq-20200219-p542cl Revealed: Xero to head $100b 'Aussie Nasdaq' Paul SmithTechnology Editor Feb 21, 2020 — 12.00am Accounting technology giant Xero will head the Australian Securities Exchange's new technology index to be unveiled today, giving investors the chance to invest in the fastest-growing segment of the market in one trade. The ASX will launch the S&P/ASX All Technology Index or the S&P/ASX All Tech for short, at a ceremony at the exchange in Sydney, with technology minister Karen Andrews and executives from each of the WAAAX stocks (Wisetech, Afterpay, Altium, Appen and Xero) there for the ribbon cutting. ASX General manager of listings Max Cunningham has been spearheading a push to attract more tech listings from around the world. Rhett Wyman The index will go live from Monday morning and will be a smaller, localised version of the US's Nasdaq composite index. The executive general manager of listings and issuer services at the ASX, Max Cunningham, said returns from investing in tech have exceeded the benchmark S&P/ASX 200 Index in recent years, and this new index would be seen as highly investable. "There are 20 tech companies with market caps over $1 billion, and the index is a barometer of the general health and performance of that part of the market," he said. After Xero, the top five of the inaugural list comprises Computershare, Afterpay, REA Group and Altium. Mr Cunningham has spearheaded a push for the ASX to be seen as a junior Nasdaq board, and as a well regarded home for tech companies which are large, but not necessarily the equivalents of Alphabet or Atlassian in terms of market capitalisation and profile. Minister for Industry, Science and Technology Karen Andrews said the All Tech index would play a big role in increasing the tech sector’s visibility. Paul Harris The number of tech stocks listed on the ASX has doubled from 100 to over 200 in the last five years and the All Tech will have 46 stocks included from Monday morning. The index does not have a set number of stocks and will be rebalanced quarterly. To qualify, a company must have a market capitalisation of at least $120 million, have a minimum of $120,000 worth of value traded every day, a minimal investable weight factor of 0.3 and a minimum relative liquidity ratio of 30 per cent. Mr Cunningham's push for international tech companies to list on the ASX is starting to bear fruit, with six overseas-based stocks on the first index. Fineos is from Ireland, Xero, Pushpay and Volpara from New Zealand and Life360 and Livetiles from the US. "If we actually look at the top five tech listings that we had in calendar 2019, only one of them was Australian; Tyro. Of the others, three were from the US and one was from Ireland," he said. Guide for investors The ASX has attempted to give investors a guide to the performance of the sector before with the Information Technology sub-index, but its company classifications had not been as tightly refined and telecommunications stocks like Telstra had an inordinate impact on the overall performance, due to its size being 60 per cent of the index. Mr Cunningham said the All Tech index would avoid having a breakaway success company warping the overall picture, by having a rule that no company can exceed 25 per cent of the index by weighting. Telco stocks do not count as tech since changes to S&P's GICS (Global Industry Classification Standard) classifications in September 2018, which created a new sub-category of communications. The new index will also likely be boosted by the inclusion of Tyro, Nitro and Limeade, which all listed last December. They are absent from the initial index due to S&P rules that a company must have liquidity measures tracking over at least three months to qualify. Late last year Mr Cunningham said ASX had been working with S&P for much of 2019 on company classifications, as the index will be based on its GICS criteria, which currently incorporates about 210 ASX stocks. Ms Andrews said the All Tech index would play a big role in increasing the tech sector’s visibility. "It will make it easier for everyday Australians to invest in tech companies, and share in their success," Ms Andrews said.