Small cap IPO market sees strong start to 2017
The initial public offering (IPO) market in Australia has seen a strong start to 2017, with a particularly impressive performance of the small cap sector, according to the study by HLB Mann Judd.
During the first six months of the year, the market saw a number of listings go up to 57 from 34 during the same period last year.
HLB Mann Judd’s study, IPO Watch, also found that 86 per cent of new companies had a market capitalisation of less than $100 million, with all listings during the first quarter of the year being small cap companies.
Also, a significant portion of companies that applied to list in the second half of the year were also small caps however that would result in a drop in the total amounts raised in 2017 compared to recent years.
In 2016 and 2015 the total amounts raised were $7.5 billion and $7.2 billion, respectively.
HLB Mann Judd Perth’s partner and author of the report, Marcus Ohm, said: “This time last year, we had seen two companies list with a market capitalisation of around $1 billion and 11 companies list with a market cap over $100 million”.
“So far in 2017, there has only been one listing with a market cap greater than $500 million, and seven with a market cap between $100 million and $500 million.”
Ohm also said that the current pipeline of listings for the remainder of 2017 did not show any particularly large listings on the horizon.
In terms of sectors, the study found that the pharmaceuticals, biotechnology, and life sciences sector saw some movement in the first half of 2017, with four listings raising a total of $37 million.
“A number of these listings were related to medical marijuana changes,” Ohm stressed.
The market also saw a decline in the number of reverse takeovers or backdoor listings due to the changes to the Australian Securities Exchange (ASX) listing rules which made the reverse takeover much less attractive.
Recommended for you
Almost 70 per cent of asset managers are planning to control costs via product rationalisation, according to a global survey by Northern Trust, as they seek to offer clients a best-in-class experience.
Fund managers should work collaboratively with data providers to minimise greenwashing risks in their products as a positive ESG score can be a “gamechanger” for a fund’s demand with advisers.
Asset manager Janus Henderson has made two acquisitions in the ETFs and emerging markets space as it takes strategic steps to meet client needs.
Self-reporting issues to ASIC could lead to a reduced charge for a fund manager but it may not exempt them from enforcement action altogether, according to ASIC chair Joe Longo.