Euroz Securities has for the first time knocked Patersons Securities off its position as the top stockbroking firm in Perth for equity capital raisings.
Euroz Securities has for the first time knocked Patersons Securities off its position as the top stockbroking firm in Perth for equity capital raisings.
WA Business News’ fourth annual survey of Western Australian capital raisings highlighted the general strength of the stock market, with many firms having a bumper year.
Euroz, which was established six years ago by a breakaway group from Patersons, played a lead role in 17 transactions, raising a total of $903 million.
The big total was greatly helped by its role as lead manager for Beach Petroleum’s $247 million rights issue and $112 million placement.
Euroz’s ability to manage such large capital raisings reflects its focus on servicing institutional investors.
In contrast, Patersons’ average deal size was much smaller, reflecting its traditional focus on retail investors.
It played a lead role in 102 transactions raising a total of $827 million.
The largest WA capital raising last year was Emeco Holdings’ $944 million initial public offering, which was jointly managed by three major international firms.
The Emeco deal was notable for its size but also because the earthmoving equipment company had to discount the offer price to win investor support.
Despite the general strength of the market, institutional investors can still be very demanding.
The scrapping of Coogee Resources’ $380 million float late in the year provided another reminder of the same trend.
Coogee, like Emeco, had a blue chip advisory team, with local firm Azure Capital acting as corporate adviser and Credit Suisse and Goldman Sachs JBWere being joint lead managers.
Despite the impressive line-up, the timing and pricing of the IPO were still out of kilter with what the market wanted.
The capital raisings survey highlighted the continued revival of Hartleys, which was Perth’s number one broking firm in the 1980s and 1990s, but came close to collapse a few years ago.
Led by managing director Richard Simpson, it has carved out a strong niche over the past couple of years, raising capital for small to mid-cap resources and industrial companies such as Allied Gold, Jabiru Metals and RCR Tomlinson.
Close on its tail is Argonaut Capital, established five years ago. Led by chairman Charles Fear and managing director Eddie Rigg, it has grown rapidly and offers a broad range of corporate advisory, capital raising, broking and funds management services.
Growing Perth firms include Max Capital, the securities dealing arm of corporate advisory outfit Grange Consulting, and Cygnet Capital.
Interstate broking firms continued to play a prominent role in managing capital raisings for WA companies.
Southern Cross Equities, Austock, BBY and Shaw Stockbroking all managed substantial capital raisings for WA clients last year, as they have done in most years.
The survey focused on Australian broking firms and therefore does not convey two other important trends.
One is the prominence of the Toronto stock market, particularly for WA companies looking to raise large amounts of capital.
Anvil Mining raised $180 million through a syndicate of Canadian underwriters led by Paradigm Capital, while Equinox Minerals raised $124 million through Canadian firms Sprott Securities, CIBC and GMP Securities.
Mirabela Nickel, Moly Mines, Western Areas and Moto Goldmines (which has since delisted from the ASX) also raised capital in Canada this year.
A second trend not apparent from the survey is the amount of capital raised by WA firms without the help of stockbrokers.
Many of last year’s IPOs proceeded without a lead manager or underwriter, as did numerous small placements.
But it wasn’t just the small capital raisings.
Sundance Resources, chaired by iron ore veteran George Jones, quickly raised $30 million through Capital Investment Partners, a company associated with two of its directors.
Several companies raised substantial funds through strategic placements to institutional investors. The biggest example was Fortescue Metals Group’s $US400 million placement to US investor Leucadia.
