2007 produced an increase in IPO activity across Australia despite the mid year uncertainty, according to the Deloitte IPO Report for calendar 2007, released today.

Deloitte Corporate Finance Partner, Steve Woosnam, said the credit market crisis did not appear to significantly slow IPO activity in 2007 although the current outlook for 2008 is less rosy.

The number of IPOs increased by 41% from 184 in 2006 to 260 in 2007, while the value of funds raised climbed by 29% to $10.4 billion. However overall share price performance was weaker than previous years.

Seven of the ten largest IPOs in 2007 were trading below their issue price at 31 December prior to the recent market falls.

The average share price movement of the ten biggest floats, which accounted for 59% of all funds raised from IPOs in 2007, was -10%, although this was largely the result of the 88% fall in the price of Rams Home Loans.

The average return for all IPOs in 2007 remained strong at 30%, buoyed by exceptionally large gains from many small floats of resource exploration companies. However, the all-IPO average return was down from 53% in 2006.

The odds of backing a winner were also substantially lower in 2007: 52% of all IPOs in the past year were trading at or above their issue price at 31 December, compared to 77% in 2006.

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