A new report from HLB Mann Judd recorded 74 new listings on the ASX in 2020, 12 more than the year prior.
The second half of the year had captured the vast majority (84 per cent) of the 2020’s total listings. Only 12 companies had listed during the first half.
Share price performance was positive generally for new entrants, with 49 of the 74 entrants reporting year-end gains, with the average gain being 34 per cent.
Around a quarter (24 per cent) of the new listings recorded a gain of 50 per cent or more for the year.
According to HLB Mann Judd Perth partner Marcus Ohm, although there had been strong gains for the newcomers, the performances were in line with the rest of the market.
The strong finish to 2020 is expected to continue into the 12 months ahead, with 14 companies across nine sectors having applied for listing at the end of year.
“These companies are seeking a total of $172 million which is a substantial increase on the $111 million sought at the same time last year,” Mr Ohm said.
“It is telling that in a post-COVID-19 recovery environment, the pipeline is quite good compared to previous years, and this reflects the strength of Australia’s economic fundamentals and positive investor sentiment.”
He also added the end to the year reflected the resilience of the Australian economy.
“The June quarter in particular was heavily impacted by falls in the wider market and high levels of investor uncertainty,” Mr Ohm said.
“But there were signs of improvement by September, which was arguably reflected in Australia’s broader economic position, and the December quarter then experienced a resurgence in activity with volumes and funds raised being the highest in a single quarter since 2010.”
Total funds raised for the year were $4.9 billion, a substantial reduction on previous years, compared to $6.9 billion in 2019 and $8.4 billion in 2018.
“The fall in volumes impacted on total funds raised with the first half of the year total of $132 million representing just 3 per cent of the total funds raised for the year,” Mr Ohm commented.
“The largest amount raised during the first quarter was $30 million by Atomo Diagnostics which was the only large cap IPO in the first half of the year – the other 31 occurred in the second half of 2020.”
Listings of large caps – in excess of $100 million market capitalisation – performed well with 31 new listings, which were comparable to the previous year and above the five-year average of 29 listings. On average, large-cap listings raised $148.6 million.
At the top end, there were three new entrants with a market cap on listing in excess of $1 billion, a higher number than the one such listing in 2019.
Looking at small-cap listings, or companies with a starting market cap of less than $100 million, there was a total of 43 new market entrants. The number had increased from 28 in 2019 but was below the five-year average of 54.
A total of 15 different industry sectors recorded listings in 2020, with materials contributing 32 per cent of all listings. Retail had risen from 2019, with seven IPOs compared to one the year before.
Mr Ohm noted there was a slip in the number of listings from the software and services sector, from 12 to nine in 2020.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
