11/06/2008 - 22:00

Perth leads IPOs but numbers with Sydney

11/06/2008 - 22:00

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Perth remains on track to take the listings crown for 2007-08, having launched the most companies on the Australian Securities Exchange this financial year.

Perth leads IPOs but numbers with Sydney
LEADER: 91 companies floated on the ASX for the financial year to the end of May. Photo: Tim van Bronswijk

Perth remains on track to take the listings crown for 2007-08, having launched the most companies on the Australian Securities Exchange this financial year.

The 91 companies floated on the ASX out of Perth for the financial year up to the end of May was substantially ahead of the next biggest market, Sydney, which has listed 70 companies in the same time frame.

However, when it comes to the size of listings, Perth-based companies are clearly smaller than their Sydney counterparts, with their value upon listing at $2.03 billion for the 11 months ending May 31, compared with $5.78 billion.

After a big slowdown in equity markets at the start of calendar 2008, Perth had four of the nation's nine IPOs for May, as the market made a cautious revival from April.

Last month, Automotive Technology Group Ltd raised $6 million, Carbon Conscious Ltd raised $8 million, Chrysalis Resources Ltd $3.6 million, and Energy & Minerals Ltd brought in $5 million.

The four listings had a market value upon listing of around $49.4 million, more than 25 per cent of cent of the total $178.7 million of market value of new listings, which happened to be dominated by Brisbane last month with the $124.1 million float of Runge Ltd.

Montagu Stockbrokers Pty Ltd managing director Adam Davey said IPO activity had slowed significantly in calendar 2008, reflecting concerns in capital markets.

That slowdown is in evidence when the current financial year is compared with the 2007 calendar year, during which 123 WA-based companies listed, up from 96 in calendar 2006.

"It has definitely changed," Mr Davey said.

"Clearly the market was busy in the first half of the financial year when the market got a bit hot."

He said the retail market dropped away and that segment was generally needed for IPOs that required a spread of investors.

However, he said professional investors had returned to the market in the past two months.

"The professional guys started to come out again. There's plenty of money around."

Montagu had been more active in secondary raisings in this market, with retail investors scared off and the valuations of already listed companies making them more competitive.

"People are still of the view that there is a resources boom and we are in a super cycle."

However, Mr Davey said good projects with good management, especially with a track record in capital markets, were hard to find at this stage.

Hartleys lead director corporate finance, Grey Egerton-Warburton, said a lot of companies had shifted their plans when the market melted down earlier this year.

However, even though his firm was not a player in the resources IPO sector where much of WA's listing activity occurs, he had noted a turn in sentiment.

"They have started to feel punchy enough to come out and start to speak to people again," Mr Egerton-Warburton said.

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