Shocking year for IPOs
The average returns from initial public offerings (IPOs) have fallen by nearly 97 per cent compared to the 2006-07 financial year, according to research released by Deloitte today.
While the average return on an IPO for this financial year was a loss of 3 per cent, the average return last financial year was a gain of 91 per cent, Deloitte said.
Perhaps unsurprisingly considering the low returns, there has also been a sharp decline in the number of IPOs, with 75 per cent of all IPOs occurring in the first half of the financial year.
Deloitte Corporate Finance partner Steve Woosnam said that the average return on IPOs was actually even worse than the figures indicated, because the numbers were inflated by some good performances in the resource sector.
“The story of the past year is more accurately reflected by average loss of 29 per cent for investors in the 10 biggest IPOs of the past year. These floats accounted for almost 60 per cent of all funds raised in 07-08 and are more representative of the experience for most IPO investors,” he said.
He added that eight of the top 10 IPOs traded below their issue price at year-end.
The Deloitte research showed that the average share price gain of resource IPOs was 18 per cent, while the average for industrial IPOs was -35 per cent.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
