39 companies held IPOs in first half of 2018: HLB Mann Judd

In the first six months of 2018, 39 companies held initial public offerings (IOS), with 16 materials companies, six software and services companies, and five diversified financials topping the list, according to HLB Mann Judd.

HLB Mann Judd has issued its mid-year report into Australian IPO activity, and the report shows that there were fewer listings in the first six months of 2018 compared to the previous time in 2017 – 39 compared to 57 – the result was still stronger than the previous five year average of 37 listings in the first half of a calendar year.

There are more listings in the second half of the year than in the first, so the second half is likely to be positive, says Marcus Ohm, partner at LB Mann Judd and author of the report.

“Usually, around two-thirds of listings take place in the second half of the year, so 39 listings in the first half is a strong start,” Marcus says. “Indeed, 2017 was an anomaly in that the listings were relatively evenly spread throughout the year. In total there were 110 listings during 2017, and 57 of them – just over half – were in the first six months.”

A total of $2.5 billion was raised from IPOs in the first half of the year. Small cap stocks – those with less than $100 million of market capitalisation at listing – dominated, but there were eight new listings from companies exceeding $100 million market capitalisation.

Of the 39 IPOs in the first half of 2018, 16 were materials companies, and five of those companies are solely gold producers. Copper and nickel were also represented, with six and five listings, according to the report. The materials companies enjoyed support from the market, with an average of 98% of subscription rates achieved. A total of 28 companies met all their subscription targets. The L1 Long Short Fund Limited raised $1.3 billion after initially seeking $600 million, the report noted.

In the second half of the year, Marcus says that small cap, junior exploration companies in the resources sectors “appear to be the strongest contributors” to upcoming listings.

“On 1 July 2018, there were 35 companies that had applied to list on the ASX, and eleven of these are in the materials sector,” Marcus says. ”Technology stocks are also showing signs of improvement, with a further eleven companies in technology, biotech and software and services applying to the list. Technology stock activity should be a positive for the ASX, as these sectors are often comprise o larger companies. Overall, there is a broader range of companies planning to list in 2018, with real estate, food beverage and tobacco, and capital goods each having several listings in the pipeline.”