ASX extends program

The ASX has extended its trial equity research subsidy program for another year after data showed 60% of the companies covered reported an increase in turnover of their securities in the past 12 months.

The extension followed results from the trial: 60% of participating companies reported higher turnover of their securities over the past 12 months, suggesting the scheme was having an impact on trading activity.

The scheme was introduced to help smaller companies secure analyst coverage and to encourage larger research houses to cover companies they would otherwise ignore.

The program is primarily aimed at smaller companies that struggle to get analyst coverage, while also incentivising larger research houses to expand coverage to companies they might otherwise overlook.

An increase in turnover of securities generally means more trading activity and higher turnover (transactions) in those stocks. According to the article, 60% of covered companies saw this rise over the past 12 months, which the ASX used to justify extending the trial.

More analyst coverage can provide investors with greater information, analysis and visibility on smaller companies, which may help with research and decision-making — the program was designed to boost that coverage.

The ASX extended the trial equity research subsidy program for another year.

Yes — the scheme is specifically intended to encourage larger research houses to cover companies they would otherwise ignore, increasing the likelihood those firms will expand their research coverage.