Home / News / HLB Mann Judd sees IPO gold rush

HLB Mann Judd sees IPO gold rush

News

After a soft streak in a chaotic 2020, the IPO market is expected to take off with a “strong pipeline” of new floats coming through 2021, according to HLB Mann Judd.

The Australian IPO market is gaining pace after a sluggish period that saw a scant $132 million raised in the first half of 2020, with the end of 2020 “one of the largest quarters by volume that (HLB Mann Judd) had seen for some time” and $2.9 billion raised in the first half of 2021, a result primarily driven by 13 large cap IPOs.

“There’s been a very strong recovery in listings. It’s been very, very healthy, particularly in the materials sector. There’s a very strong demand for IPOs and capital raising in the materials sector, led predominantly by gold,” said Marcus Ohm, partner at HLB Mann Judd.

“Activity was driven by favourable macroeconomic and capital market conditions together with strong investor sentiment, and reflected the strength of the market as a whole with the ASX All Ordinaries index growing by 11% over the six month period.”

Still, IPO performance was “subdued” compared to the wider market. New listings saw an average gain of 6 per cent in the period, which Ohm said was a “surprising trend” given recent years of substantial outperformance

Five of the 13 large cap IPOs were contributed by the materials sector, with future forecast commodity prices and a solid near-term outlook driving demand for key commodities, and materials lead the future pipeline of listings. Of the 42 listings on the horizon at end June, 27 are materials listing looking to raise a total $707.4 million, with 15 holding gold projects – the “flavour of the month”, according to Ohm.

The best performing sectors were pharmaceuticals, biotech, and life sciences, which recorded average period end gains of over 15 per cent; the worst performing sector was commercial and professional services, which saw an average period end loss of 31 per cent, while the single listing in consumer durables and apparel ended with a 48 per cent loss for the year. HLB Mann Judd also observed a slackening in the number of fintech and tech IPOs coming to market, but believe their numbers will pick up before the end of the year.


Lachlan Maddock

  • Lachlan is editor of Investor Strategy News and has extensive experience covering institutional investment.




    Print Article

    Related
    AustralianSuper retirement chief hits the road  

    The retirement chief of the $335 billion AustralianSuper, who was “instrumental” in delivering a slew of member experience uplifts across a 17-year stint with the fund, will leave this month to establish a new venture.

    Lachlan Maddock | 6th Nov 2024 | More
    Super needs a ‘major re-engineering’ for retirement to succeed

    It’s “quite realistic” that many super funds will take too long to build the basics of a retirement income strategy, and the system might need a licencing regime to make sure members are getting the best service.

    Lachlan Maddock | 6th Nov 2024 | More
    Why value is better at taking market beat-downs

    Value stocks are hit harder in market drawdowns but come out of them faster and harder, according to research from Pzena Investment Management.

    Lachlan Maddock | 1st Nov 2024 | More
    Popular