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A STUDY by HLB Mann Judd shows IPO activity narrowly averted a 10-year low in 2009, but a bounce back looks likely in 2010 as investor appetite grows.
The Small Cap IPO Watch found that total amounts raised by small cap listings were down 43 per cent on 2008, with the number of large cap listings down 57 per cent.
But report author Geoff Webster says the November listing of Myer Holdings Limited (MYR) gave a large boost to the total funds raised, accounting for 74 per cent at $2.2 billion.
“The remaining 38 (large cap) listings raised just $0.765 billion between them, down three percent on 2008 and 91 percent on 2007 levels,” says Webster.
“The global financial crisis brought fund-raising to a near standstill for the majority of the last two years.”
He says a positive sign for investors is that the majority of 2009 listings recorded gains on their issue prices.
“Between them, the top 10 performing companies returned a healthy average year end return of 81 per cent (2008: -12 per cent). Returns from the 10 best performing companies ranged from +275 per cent to +50 per cent (2008: +110 per cent to -40 per cent).”
The report cited 16 companies that have already applied to the ASX for listings, which would equal 41 per cent of total 2009 floats. The majority of the $288 million in capital sought has come from Western Australian company Q Copper Ltd.
“While the last 18 months have been difficult for many, clever businesses have utilised the time whilst the IPO market has been largely shut down to ensure they are ready to list once the appetite for IPOs returns,” says Webster.
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