Contact: Steve Woosnam
Deloitte
Partner - Corporate Finance
+61 (0) 2 9322 7531
Contact: Melinda Loew
Deloitte
Media & Communications Manager
+61 (0) 2 9322 7146
Turbulent conditions in the Australian share market did little to dent the IPO market, with almost $3.5 billion raised in the September quarter despite the market jitters, according to the latest Deloitte IPO Quarterly Update released today.
Deloitte Corporate Finance Partner, Steve Woosnam, said the new survey found that, while more than half of all IPOs in the September quarter were trading below their issue price, the level of capital raised compared favourably with this time last year, and was only bettered by the June 2007 quarter in the last two calendar years.
In total, 66 IPOs are expected to list by the time the quarter draws to close at the end of this week, raising a total of $3.5 billion.
In addition, the average return for all IPOs since listing, calculated as a simple average, was a healthy 8%, despite market concerns.
“Although equity markets indices were now above the level at the start of the quarter, confidence in the equity market has been shaken by volatility in the wake of the sub prime mortgage crisis in the US,” Mr Woosnam said.
“This volatility has primarily affected the financial services sector, but the market remained supportive of quality businesses coming to the market.
"This is reflected by the performance of NRW Holdings, which raised $303m and has traded up 31% since listing in early September.
“In contrast, the large loss incurred by RAMS shareholders – the largest IPO in the quarter – was the main casualty of the uncertainly caused by the sub prime concerns.
“Given the current market sentiment it is likely to be a tough environment for financial services IPOs for some time.”
Mr Woosnam said he expected IPO activity in the December quarter to drop as the mid quarter volatility caused some companies to defer timetables and assess market conditions.
To view the full press release please click on the attachment below.
