Aussie IPOs lower in H2
Despite geopolitical impacts and volatility, the market saw strong capital raisings driven by M&A activity and equity raised in share placements that has doubled since FY16 to $20.58 billion, according to a MinterEllison study.
The report, titled “MinterEllison Directions in Capital Markets Reports 2017”, found that despite the market volatility, caused by Brexit and the US presidential election, there was a surge in initial public offerings (IPOs) in the first half of this year, which amounted to $11.1 billion, while the second half saw a drop of the aggregate Australian IPOs to only $3.16 billion, being less than one third of the value raised in the same period in FY16.
However, according to MinterEllison partner and equity capital markets and corporate bonds sector specialist James Hutton, the secondary equity raisings were less affected, although still down by 18 per cent to $37.16 billion, due to the absence of large bank capital raisings that occurred in FY16.
At the same time, large M&A linked raisings remained a strong theme during the year.
According to MinterEllison’s partner and equity capital markets expert, Daniel Scotti, the positive aspects of the equity market also included a number of foreign company listing on the ASX, particularly in the technology sector with 39 new players coming onto the board.
“One of the equity capital market sweet spots in FY 2017 was foreign listings, particularly the burgeoning Israeli technology sector bringing ten such listings to the ASX in the financial year,” he said.
“Strong interest from Chinese companies to complete ASX listings is also still there.”
Also, the study said that FY2018 would see a strong equity capital markets activity in secondary raisings, especially in sectors such as health and aged care, financial services, resources and technology.
At the same time, the appetite for Australian issuers in US private placements, which was a significant trend in FY2017, would continue to grow in FY2018.
AUTHOR
Oksana Patron
Recommended for you
While the last several months have seen increased market volatility, particularly in the US, advisers said there are multiple reasons why there has been an increase in defensive asset flows.
Scarcity Partners believes the dynamics playing out in the managed account and outsourced chief investment officer market are “here to stay” based on positive developments in financial advice.
Former executive chairman of failed stockbroker BBY, Glenn Rosewall, has been charged with aiding, abetting, counselling or procuring BBY’s dishonest conduct in relation to a financial service.
Fidelity International research has revealed Australian investors are significantly more optimistic about the market outlook and feeling more comfortable than their APAC peers, despite ongoing market volatility.
