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Highlights
Local shareholding in Newmont (ASX:NEM) has sharply declined since its merger with Newcrest Mining.
An increasing number of companies with dual listings are shifting their primary focus overseas.
ASX dividends may be impacted as more companies reduce their presence on the Australian Securities Exchange.
The materials sector on the Australian Securities Exchange (ASX), including the ASX 200 and All Ordinaries indexes, is undergoing notable changes with several prominent companies relocating their primary listings overseas. Newmont Corporation (ASX:NEM), which acquired Newcrest Mining, has seen a significant reduction in locally held shares, marking a broader trend among dual-listed entities.
Following the merger, Newmont retained a primary listing on the New York Stock Exchange, and its presence on the ASX has become more symbolic than central. This shift has led to a sharp decrease in the proportion of shares held within Australia. As local ownership declines, participation in company governance and eligibility for ASX dividends becomes less representative of Australian shareholders.
Decline in local share registers gaining pace
The local shareholder register for entities like Newmont has seen a steady decrease since the merger with Newcrest. Prior to the merger, Australian investors held a considerable share of the combined entity. However, with the primary listing anchored in the United States, the trading volume and corporate focus have moved in that direction.
This trend has also contributed to changes in liquidity patterns on the ASX. A lower volume of local transactions results in decreased visibility on the domestic exchange, even though the company remains listed. The reduction in local shareholding may also lead to declining weighting in the ASX 200 and All Ordinaries, influencing broader index dynamics and impacting funds with ASX-only mandates.
Corporate activity influenced by overseas listings
Companies seeking access to larger capital markets are increasingly choosing to list primarily on foreign exchanges. While retaining a dual listing on the ASX, the strategic decision often reflects ambitions to tap into deeper global liquidity and larger institutional investor bases.
For shareholders based in Australia, this often translates to reduced influence in corporate decisions and fewer benefits commonly associated with local listings, including asx dividends. Shareholder meetings, corporate announcements, and regulatory disclosures may be geared more toward the primary exchange, reducing engagement with the ASX environment.
Broader implications for the ASX ecosystem
As more Australian-rooted companies opt for dual or overseas primary listings, concerns have emerged regarding the long-term implications for the domestic exchange. Reduced local participation in these entities can affect the vibrancy of the ASX, as well as its appeal to new market entrants.
From a structural standpoint, the shift may impact the distribution of asx dividends and the flow of capital within the Australian market. Companies that primarily report in foreign jurisdictions often align their dividend policies and capital return strategies accordingly, potentially sidelining domestic expectations.
The decline in local shareholding and increased international orientation among dual-listed companies underscores a changing landscape in the Australian capital market. This evolving trend continues to shape the composition and strength of major indexes such as the ASX 200 and All Ordinaries.
