IPO activity set to slow
Initial public offer (IPO) activity in 2008 is unlikely to surpass that of last year, according to Deloitte, which indicated that seven of the 10 largest IPOs in 2007 were trading below their issue price prior to recent stock market falls.
Despite mid-year uncertainty, 2007 produced an increase in IPO activity in Australia that is unlikely to be mirrored in the next 12 months, according to Deloitte.
Commenting on the credit market turmoil and volatility of equity markets, Deloitte corporate finance partner Steve Woosnam said financial and real estate sectors were particularly affected in 2007.
“The demise of RAMS was the most spectacular example, but more than half of all diversified financial floats were trading below issue price at year end. In the real estate sector, six of the seven IPOs were trading below issue price at December 31, 2007, reflecting widespread concerns about the funding structures of real estate companies and property trusts,” he said.
The top 10 performers for IPOs in 2007 were all in the resource sector, 90 per cent of which were Perth-based, and the top performer — tungsten and tin explorer Wolf Minerals — gained 975 per cent in less than one year.
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