UBS Leading Australia Share Sales as Risk Appetite Rises

UBS AG led equity underwriters in Australia for the third consecutive year after managing the biggest share placement of 2013, while also taking the top spot in mergers and acquisitions for the first time since 2010.

UBS held a 43 percent market share in equity capital market transactions for the year, according to updated data compiled by Bloomberg, following further submissions by the Zurich-based bank that lifted it ahead of Sydney-based Macquarie Group Ltd.’s 26 percent share. UBS underwrote a A$1.2 billion ($1.1 billion) stock sale by Insurance Australia Group Ltd. two weeks ago, the data show.

The Swiss bank and its competitors benefited from a year-end revival in investor appetite that saw A$9.8 billion in equity being raised in the past three months, the most since the third quarter of 2009. The firm has led equity underwriters in Australia for eight out of the past 10 years, the data show.

“The fourth quarter was incredibly busy for a number of capital market participants with investors having more choice and opportunities than any time in the past five years,” Simon Cox, UBS’s Sydney-based head of equity capital markets for Australia, said by phone. “While that has created some amount of indigestion, the positive cash flow into equities remains and will lead to increased demand in 2014.”

Navleen Prasad, a Sydney-based spokeswoman for Macquarie, declined to comment.

Stock Rebound

A stock rebound helped Australian companies raise A$20 billion through share sales this year, the most since 2009, according to the data. Some 70 percent of the year’s A$6.4 billion of IPOs was raised in the fourth quarter as the benchmark S&P/ASX 200 Index of shares climbed to a more than seven-year high on Oct. 28.

The IPOs since Oct. 1 have fallen 0.1 percent on average since trading started, the data show. That compares with gains of 15 percent in Hong Kong, 27 percent in London, 49 percent in Japan and 38 percent for U.S. offerings

Nine of the IPOs since Oct. 1 are trading below their offer prices, with Melbourne-based Pact Group Holdings Ltd. slipping 14 percent and broadcaster Nine Entertainment Co. dropping 4 percent, according to data compiled by Bloomberg. The two companies’ sales were the largest in Australia this year, raising a combined A$1.3 billion.

UBS was one of the advisers on Nine Entertainment’s A$625 million IPO. The firm also managed three share sales this year that raised A$1.4 billion for Aurizon Holdings Ltd., the nation’s biggest haulage company, the data show.

The Swiss bank handled M&A transactions worth $22 billion, giving it a 25 percent market share. It was one of two advisers to a group led by Australia’s Industry Funds Management Ltd. for a A$5.1 billion lease on Port Botany and Port Kembla. UBS also advised Insurance Australia Group on its A$1.85 billion purchase of Wesfarmers Ltd.’s insurance unit.

Merger transaction volumes of $89.6 billion this year exceed 2012’s $85 billion.

Before it's here, it's on the Bloomberg Terminal.