Xero shares listing solely on the ASX - a guide
Xero Limited announced in 2017 plans to delist from the New Zealand Stock Exchange (NZX) and list solely on the Australian Securities Exchange (ASX), consolidating Xero’s listing on a single exchange rather than spreading it across the two markets.
Xero has officially cited four reasons they are delisting from the NZX:
- Access to a larger market (debatable)
- Increased liquidity (a larger number of buyers and sellers on a single market)
- Increased relevance to a range of larger investors through inclusion in ‘major ASX indices’ (in particular the ASX 200)
- Broader analyst and broker coverage (press coverage around the move will spike interest from investors)
Of the four reasons cited, probably the most important (given statements from Xero CEO Rod Drury) reason for consolidating Xero shares on the ASX is that the company is likely to be promoted from the S&P ASX 300 index to the ASX 200 index -- which could attract an increased number of institutional investors, including anyone holding ETFs that track the ASX 200.
31st of January 2018 is the last day Xero shares will trade on the NZX. All trades will be settled over the following two days (1st/2nd February) before being transferred to the ASX.
Xero Limited shares will trade solely on the ASX from the 5th of February.
The shares will be transferred on a 1:1 basis. So all existing holders of Xero shares on the NZX will receive an equal number of shares when they are transferred to the ASX.
That’s something the market will decide. But if the Xero board is correct this move should be a positive for investors.
Make sure to read Xero’s dedicated help page for investors to better understand how you will be affected by this change.
Sharesight will continue to follow this corporate action closely and will be publishing a dedicated Xero sole-listing help page when the final details are available in early February. Investors will be able to handle this transaction through Sharesight’s Merge Holding feature once the trading price on the first day of listing is known.
We will update this post with a link to the help page as soon as it becomes available.
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