IPOs down 27 per cent in 2008
Plenty of Australian financial services companies that chose not to publicly list due to recent market conditions may have had the right sentiment, according to new figures that revealed share prices of all IPOs were down by an average 27 per cent in the March 2008 quarter.
The research, conducted by Deloitte Corporate Finance, highlighted that the current low in investor confidence and its impact on equity markets had a significant impact on the performances of IPOs coming to market in that period.
Of the 33 IPOs that were produced in that time, only six traded at or above their issue price near the end of March.
This was a sharp reversal from the March 2007 quarter, when 26 of the 35 IPOs traded at or above issue price and share price performance of all IPOs, averaging a gain of 48 per cent.
Commenting on the issue, Deloitte Corporate Finance partner Andrew Annand said the trend largely reflected current equity markets rather than being specific to IPOs.
“The March quarter has seen a number of floats deferred and the pipeline of upcoming floats is extremely thin.
“The Australian Stock Exchange’s upcoming IPO register currently shows only three floats are expected in April, which would be the lowest monthly in more than five years,” he said.
According to Deloitte, the March quarter is traditionally a slow quarter, but the full effect of the current mood is yet to be seen.
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