28/01/2021 - 15:30

Resources run in 2020 IPOs

28/01/2021 - 15:30

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Newly listed businesses on the ASX returned 34 per cent in 2020, while 74 companies joined the bourse.

Resources run in 2020 IPOs
Resources businesses were the major category of IPOs in 2020. Photo: Gabriel Oliveira

Newly listed businesses on the ASX returned 34 per cent in 2020, while 74 companies joined the bourse.

The 34 per cent performance for new initial public offerings compared to only a 1 per cent rise across the ASX200, according to HLB Mann Judd.

While the first half of 2020 had been weak for IPOs, the market heated up in the second part of the year as COVID-19 risk reduced.

“There was a total of 74 IPOs listing on the ASX in 2020,” the company said. 

“Whilst this was down on the five-year average of 89 new entrants, it is notable that volumes increased significantly in the second half of 2020 relative to the difficult conditions during the first half of the year. 

“The last quarter had 68 per cent of all listings for the year with 28 companies listing in the month of December.”

The company also said 14 potential listings were in the pipeline already for 2021, worth $172 million.

The best performing part of the market was materials, including resources, HLB said.

Commodity prices were strong and would continue to back resources listings, HLB partner Marcus Ohm said.

HLB said 24 businesses listed in materials during the year, up from seven in 2019.

“More than half of new small cap listings in 2020 were from the materials sector reflecting general positive sentiment and macroeconomic factors,” HLB said. 

“These listings represented 7 per cent of the total funds raised in the current year (2019: 5 per cent) and on average raised $8.6 million.”

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