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IPO explosion likely?

INVESTOR interest in the smaller end of the market has meant a bullish start to the year for some brokers.

Brokerage turnover for Tolhurst Noall in the first four trading days of this month exceeded figures for the whole of December 2001.

Tolhurst Noall state manager Rex Turkington attributed the boost to takeover activity surrounding companies such as Normandy Mining and Hill 50 Gold, and a resurgence of interest in the junior mining sector.

An "explosion" of IPOs by smaller explorers was possible this year, Mr Turkington said, in light of the change in the gold sector supply equation - from increased amalgamation through takeovers – coupled with the dearth of junior explorers looking for new deposits in recent years.

DJ Carmichaels resources analyst Max Nind was not willing to predict a big year, or otherwise, for IPOs, saying the number of floats during 2002 would, as any other year, match market sentiment, which was difficult to call.

ABN AMRO Morgans advisor Howard Dawson said the firm was quite bullish about 2002, although it had not thought the market, particularly the big end, was so bad during 2001.

Mr Dawson is expecting the speculative end of the market to pick up some during the year, with the WA resource sector being a significant driver.

However he readily offered he was not as bullish as everyone else on new floats.

"There are not that many good assets out there worthy of a new float, although some recent floats have good potential," Mr Dawson said.

A Paterson Ord Minnett representative said the firm was happy with the start of the year, which had picked up well in comparison with the end of 2001.

The first quarter of the calendar year was looking particularly positive and Paterson Ord Minnett’s corporate services division was "very active" preparing new issues.

Paterson Ord Minnett is the lead manager for the proposed March 1 Home Building Society Limited float.

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