Australian IPO Rush to See Dozen Listings By Year-End, CBA Says
Around a dozen companies are planning to list on Australia’s stock exchange by year-end as business confidence surges following a change in the nation’s government, according to Commonwealth Bank of Australia.
Between 10 and 12 initial public offerings are expected within the next two months, Mike Neal, CBA’s executive director of capital markets, told a conference in Sydney today. Demand for the shares should see price gains of between 5 percent and 10 percent on the first day of trading, he said.
Australian IPOs have raised about $2 billion this year, a 44 percent rise from the $1.4 billion raised in 2012, according to data compiled by Bloomberg. Business confidence in the nation last month reached its highest since April 2010, according to National Australia Bank. Sentiment was boosted after the Labor government was ousted by Tony Abbott’s coalition, which pledged to cut red tape and lower taxes.
“The window is open, there’s a heap of companies that are still trying to rush through that window prior to year-end,” said Neal. “Not all will make it.”
Of the 30 Australian IPOs so far this year, 14 are currently trading above their issue price, according to Bloomberg-compiled data. Initial offers have returned 24 percent on a weighted average basis, the data show. That performance should encourage investors to support new listings, said Neal.
Online foreign exchange broker OzForex Group Ltd. (OFX), part owned by Carlyle Group LP and Accel Partners, raised A$440 million when it sold shares earlier this month. That overtook the A$338 million IPO of fertility services provider Virtus Health Ltd. four months earlier as the largest share sale in Australia this year.
Larger deals have performed better than the average, with OzForex up 35 percent since listing, and Virtus Health shares surging 55 percent this year through yesterday.
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