The number of initial public offerings (IPO) in the Australian market is set to increase in 2011, according to the latest report on the subject released yesterday by chartered accounting firm HLB Mann Judd.
"The pipeline of IPOs already planned for 2011 is substantially ahead of the same time last year. We've got 34 that are listed, while last year at this time there were 15, six of which have been put away already and last year there were two," HLB Mann Judd head of corporate finance Geoff Webster said.
The prediction comes on the back of statistics contained in the HLB Mann Judd Small Cap IPO Watch that showed strong IPO activity in the last quarter of 2010.
"The total funds raised in the 2010 December quarter exceeded any quarter in the last four years," Webster said.
Overall, 2010 saw 96 new listings, an increase from the 39 new listings witnessed in 2009 and the 68 carried out in 2008.
Total funds raised from these listings amounted to a little over $6 billion, representing a significant rise from the $2.97 billion of IPO funds raised in 2008.
Small caps, companies with a market capitalisation of $100 million or less, led the IPO activity, making up 88 per cent of the new listings last year.
"The average amount of funds raised by small-cap companies increased to a four-year high of $9.07 million, up from $7.47 million last year and exceeding even the strong 2007 year," Webster said.
"Such results suggest greater strength in the share market, with IPOs continuing to increase in number since reaching their lowest level in 2009."
Resource companies made up the majority of floats in 2010. This fact coupled with the small number of large-cap listings showed there was still a way to go before the market could be considered normal, he said.
