WA sector leads IPO activity

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THE BOURSE WHISPERER: As the mining sector continues to recover from the Global Financial Crisis of 2009 the listing of Initial Public Offerings from Western Australia has been growing proportionally.

According to new figures released in the Deloitte Corporate Finance survey, Western Australia was responsible for 63 IPOs in the year ending 30 June 2011.

This almost doubles the 33 hopefuls that listed on the boards of the Australian Securities Exchange in the previous financial year.


Source: Deloiite

The value of funds raised through IPOs also increased sharply, up from $266 million to $604 million displaying renewed confidence in what before the crisis hit had been fertile ground for companies attracting new investment.

Although it led the field, WA was not alone in witnessing an increase in IPO listings.

The Deloitte Corporate Finance IPO survey revealed that Australia-wide FY11 produced 123 floats, almost double the number in the previous financial year.

Deloitte Corporate Finance partner, Andrew Annand, said Western Australia not only generated more IPOs than any other state in 2010 it also accounted for five of the 10 best-performing floats, led by the resources sector.

The value of funds raised from investors grew from $4 billion in FY10 to $7.6 billion in FY11, however, Annand said the strong-looking numbers belied a disappointing second half of the year for IPO activity.

“The value of funds raised reflected two big-value floats earlier in the year of QR National and Westfield Trust, which together raised almost $6.1 billion,” Annand said.

“The number of floats was boosted by activity in the resource sector, which produced 95 IPOs, or almost 80 per cent of all the floats for the year.

“The successful listing of Queensland Rail in particular raised expectations for the IPO market in the new year, however, overall the market has failed to live up to these expectations, with many businesses foregoing a listing, often in favour of a trade sale.

“The equity market simply couldn’t match the valuation expectations of vendors or those achieved through private sales.”