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Capital Solutions for Regional Business

Geoff Green, Director

Director, Project Development, Bendigo Stock Exchange. phone03 9853 9585 website: email:


I am very pleased to have the opportunity to speak with you today about Bendigo Stock Exchange (BSX) and the services it is developing for businesses in rural and regional Australia.

BSX is a regionally based organisation located in Bendigo, Victoria. We strongly believe the capital raising, trading and business services we are developing for the small and medium enterprise (SME) sector will have a significant impact in rural and regional Australia over the next few years.

Today I will provide you with a brief overview of BSX, our services, how you can use them and the benefits we believe our services can provide to rural and regional Australia.

Origins of the Bendigo Stock Exchange

The new BSX is developing in a vastly world to the one that led to the creation of the original Bendigo Stock Exchange. Before looking forward it is useful to briefly look back.

Bendigo Stock Exchange has a rich history stemming back to the Bendigo gold rush days of last century. It is one of the few surviving stock exchanges in Australia today.

During the famous gold rushes of the 1800's, the gleam of gold flashed across the world. Bendigo made its mark in history, along with other famous goldfields in California, New Zealand, Canada and South Africa.

Bendigo (or Sandhurst as it was then known) was the second largest goldfield in Australia and by far the largest in Victoria. In the decade following the first discovery of gold in 1851, a staggering 5.8 million ounces was produced.

1857 marked the beginning of mechanisation as local companies were formed to sink shafts and to crush the auriferous rock. Each new company required capital to purchase equipment and build structures to work the mines. This intensive need for capital quickly stimulated the development of a local stock exchange.

Formed in the 1860's, the Sandhurst Mining Exchange (as it was initially known) occupied the historic Beehive building in busy Pall Mall, Bendigo's main street. Around 50 stock and share brokers along with managers of mining companies were housed in offices on the upper storey of the building.

The Sandhurst Mining Exchange reached its peak in the 1870's. Well known local historian George MacKay tells how “...mining companies were being floated on Sandhurst at the rate of half-a-dozen a day. Gaslights glimmered all night in the brokers' offices as staff struggled to cope with the deluge of business. In the latter half of 1870 some three hundred new companies registered and there was little abatement of the fever in the months that followed.”

In July 1871 Sandhurst was proclaimed a city, with a population of around 32,000. Thousands flooded to the region lured by the prospect of finding their fortune. The city of Sandhurst flourished.

For the first time in the rapidly developing Victorian colony, special trains brought investors from Melbourne to buy scrip at the Beehive Mining Exchange (as it was by then known), returning only when the exchange closed for trading late at night. The exchange also attracted much interest from Melbourne sharebrokers who rushed to set up offices in Sandhurst during this buoyant period.

Foreign money, particularly from Britain, was being fed into the Victorian colony at an unprecedented rate. Developments which had taken decades and centuries in other countries, happened in years. It meant too, of course, that there was plenty of money for investment in new mining ventures in places like Bendigo.

“Thousands of people blocked the path and roadway outside the Exchange and traffic was carried on under great difficulties in the main thoroughfare. The speculation in stocks and shares was extraordinary, fortunes being made and lost in a few hours. From early morning 'til late at night people dealt in shares, and went to bed to dream about them” wrote George MacKay.

However, disaster was just around the corner. On the morning of the 25 August 1871, around 6am, a fire was noticed on the first floor of the Beehive building. Within an hour the fire had engulfed both floors from end to end. The fire brigade were unable to bring the fire under control and the building was completely destroyed.

The setback was only temporary, however, as the brokers and legal managers wasted no time in moving into the nearby Shamrock Hotel where trading continued unabated.

These became the golden days of the Bendigo Stock Exchange. By November 1871 the number of companies listed had increased to 1,310, with over 18,000,000 shares registered. The collective value of Sandhurst's mining stocks approached 10,000,000.

The Bendigo goldfield became world famous during the exciting decades leading up to the turn of the century. 1900 to 1920 also saw large amounts of gold produced, although increasing costs coupled with the fixed price of gold during and after the first World War led to a general decline in the market during this period.

A mining revival occurred during the depression years of the 1930's and the increased price of gold saw several mines and new companies operating. During this time the Bendigo Stock Exchange operated by holding 3 calls a day, morning, noon and high (around 4pm). Clients could buy and sell shares at fixed brokerage rates, with trading between brokers attracting no brokerage fee. Membership of the Bendigo Stock Exchange was set at 50.

Practically all mines closed during the second World War and by 1954 the price of gold was pegged at $31.25 an ounce, effectively drawing to a close over one hundred years of successful mining in Bendigo. The total production of gold during this period exceeding 20 million ounces.

The New BSX

The key objective of the original Bendigo Stock Exchange is as relevant today as it was back in the Bendigo gold rush days. That objective was to provide an efficient mechanism for providing growth capital to young, innovative and growing businesses.

By doing so, the Bendigo Stock Exchange created significant employment, economic growth and returns for investors in Bendigo gold companies. It also stimulated significant innovation. The Bendigo gold fields introduced many innovations to mining on a world scale.

BSX's mission is, once again, to assist small and medium sized enterprises gain better access to growth capital, particularly in rural and regional Australia.

BSX is being developed by a range of joint venture parties including Bendigo Bank Group, Computershare and a range of information technology and advisory firms. The BSX venture was commenced in 1998 by Bendigo Bank, the City of Greater Bendigo, the Bendigo Stock Exchange members and Ernst & Young.

The venture quickly gained support from all three levels of government – local, state and federal. The City of Greater Bendigo played a key facilitation role in the early stages of the venture. The federal Department of Industry, Science and Resources has also a been a particularly strong supporter of the venture over the last two to three years.

BSX has a board of seven and from the outset has been a strong blend of specialist technical expertise, broad based business knowledge and specific experience in the SME sector.

Rob Hunt, Group Managing Director of the Bendigo Bank Group has been a BSX board member since its inception. Rob brings a strong commercial and technology background to BSX having led the implementation of IT systems that give the Bendigo Bank Group one of Australia's most sophisticated and innovative branch delivery systems. Rob, a well known advocate for rural and regional Australia, has also been the key driver behind Bendigo Bank's highly successful Community Bank initiative.

The BSX board also includes Barry Ackerman whose key strengths lie in his commercial and community focus. As former managing director of BTR subsidiary Empire Rubber, Barry has a clear understanding of the role that growth companies play in the Australian economy. Barry also has a well developed understanding of the key role local government can play in fostering economic vitality in regional communities through his work as a Councillor and former Mayor of the City of Greater Bendigo.

The BSX Approach

Like many organisations, BSX is driven by a number of key philosophies.

These philosophies have influenced how we seek to assist the development of the SME community in Australia, particularly in rural and regional areas.

Most importantly we believe in the innovative nature of the Australian SME community. We are strongly driven by the need to find more effective ways for the SME sector to bring innovation to market.

We believe there is real scope for many SMEs to help themselves by drawing upon a wide range of government and private sector resources. BSX aims to provides a roadmap to this assistance so that SMEs can much more efficiently find the resources that are available.

While self help is often useful, we also believe there are some critical times when it is important for SMEs to seek expert advice and assistance. Capital raising is one of those times. Financial market intermediaries such as accountants, financial advisers and brokers therefore play key roles in the delivery of a number of the BSX services.

Raising capital is always hard, even for successful businesses, and BSX doesn't pretend to have all the answers. There are, however, many useful initiatives currently underway in both government and private sector circles. Investor ready and business incubator programs for instance. BSX aims to complement rather than compete with these types of initiatives.

We believe information technology has a key role to play in delivering services to the SME community, particularly in rural and regional areas. Our web site,, plays a key role in this process. At BSX we are committed to developing our information technology systems to empower individuals, organisations and communities to develop Australian SMEs more effectively.

Strategic Alliances

BSX has a philosophy of developing strategic alliances where it is in its commercial interests to do so. A range of strategic alliances have been developed over the last couple of years and BSX is currently in negotiations with several other potential alliance partners. Two particular alliances are with Bendigo Bank Group and web page designer, David Trewern Design.

Bendigo Bank originated in Victoria's 1800's gold rush era. Today, as Australia's only regionally-based bank, it boasts a national presence and sophisticated banking technology, while retaining a commitment to community and regional development which stands it apart from its peers. Its Community Banking initiative has broken new ground in securing long-term financial services for communities threatened by bank branch closures. Bendigo Bank Group has also recently launched a Regional Development Fund that will focus on investing in soundly based businesses in regional Australia.

Bendigo Bank Group has been one of the key supporters of the BSX venture and is working closely with BSX on a range of initiatives.

BSX has developed a strong and productive strategic alliance with David Trewern Design. David Trewern Design is a specialist design studio and a well known leader in information, interaction and interface design. The agency’s leading position was recognised in winning the 'Interface Designer of the Year' award at the 1998 AIMIA national multimedia industry awards. David Trewern Design believe that the design of an internet site is as much about how something works, as how it looks. This approach is reflected in the cutting edge web site developed by David Trewern Design for BSX.

BSX Services

BSX is developing a suite of capital raising, trading and business services for SMEs. These are designed to provide the SME sector with assistance in a range of areas.

The services are operated across BSX’s web site,, and are supported by BSX staff in a range of ways. BSX has already launched the following services:

  • equity matching. This service provides an efficient mechanism for growing businesses to seeking equity investors in their business;
  • sale of business. This service provides sellers of businesses with a means of selling their business more efficiently;
  • floats. This service is brought to BSX members in conjunction with alliance partner It allows BSX members to access information on new floats.

BSX has approximately 50 opportunities listed on its existing services. These include opportunities in aqua culture, wineries, information technology, tourism, manufacturing and health.

Over the next few months, BSX will be launching a range of additional services including the BSX market. The BSX market will initially be operated in a relatively simple way. Our initial listings are likely to be companies in rural and regional areas with existing shareholder bases that are seeking a higher corporate profile and a mechanism for their existing shareholders to trade their shares.

The BSX web site,, will display information about listed companies and the prices at which their shares trade. The trade engine will be provided by major information technology company Computershare and Bendigo Bank Group will provide clearing and settlement services for the BSX market.

BSX has been working intensively with the Australian Securities & Investments Commission and the federal government on the approval process for the BSX market and expects to be in a position to launch the BSX market in the 3rd quarter of 2000.

BSX Web Site –

The BSX web site plays a key role in the delivery of the BSX services. It is a multilayered web site with a sophisticated navigational system. This enable different types of users to access and utilise the BSX web site in different ways depending upon their particular needs.

The BSX web site has the following types of users:

  • Internet surfers. They have free access to the public sections of the BSX web site;
  • BSX mailing list. Users can register on the BSX mailing list to be kept regularly informed of developments at BSX via BSX News, which is emailed monthly;
  • BSX members. BSX members have full access to all of the BSX services in the BSX Members area of the web site.
  • BSX advisers and brokers. BSX advisers and brokers also have full access to the all of the BSX services as well as being profiled on the BSX web site

Registered users have grown rapidly since the BSX web site was launched and include SMEs looking for capital or other assistance, accountants, lawyers, brokers, financial advisers, government bodies, venture capitalists, specialist investment funds and business angels.

The BSX web site is supported in a range of ways by BSX staff including promotional material, one on one meetings with potential investors and companies seeking capital and presentations at various industry forums.

Using the BSX Services

The BSX Services are primarily used by four key types of people and organisations.


Entrepreneurs that use the BSX services range from start up companies trying to get a new innovative venture off the ground, more established SMEs looking for growth capital to fund expansion or the requirements of a large new contract or existing owners seeking to sell a business. Entrepreneurs are also often looking for strategic alliance opportunities or specialist resources such as an independent director.


BSX works with a wide range of advisers including accountants, business advisers, brokers, lawyers and investment bankers. Many of the entrepreneurs BSX works with require specialist advice from these types of advisers. BSX therefore creates commercial opportunities for them to increase their client bases.


BSX works closely with all levels of government, particularly in relation to programs that are potentially of interest to the SME sector. We are working increasingly closely with local government economic development units as they are often seeking the type of services offered by BSX to assist in the promotion of specific opportunities in their regions.


BSX is building a strong network of investors that have in interest in SMEs, particularly those located in rural and regional areas. In particular, BSX works closely with venture capitalists, specialists funds (such as the Bendigo Bank Regional Development Fund) and business angels.

Benefits for Rural and Regional Australia

BSX is a regionally based organisation with strong links to, and understanding of, rural and regional Australia. We believe we can play an important role in the development of sound and innovative business opportunities in country Australia. Importantly BSX can also provide an important bridge between metropolitan and rural and regional Australia.

Most importantly, BSX recognises the positive flow on benefits that a vibrant local business sector can have for the well being of a whole community. By providing rural and regional communities with some of the capital market mechanisms required to control the development of their own capital, BSX will play an important role in the development of sustainable rural and regional communities.

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