Steady quarter for IPOs

WHILE the September quarter could best be described as a dismal one for initial public offers, the number of Western Australian firms listing on the stock market has largely remained steady compared with the previous quarter.

Global equity markets continue to remain nervous about the state of the US economy, but some local investors still went ahead and took what is becoming an increasingly small window for IPOs.

During the first three months of the 2009 financial year, 12 WA companies listed on the Australian Securities Exchange, raising a total of $63.4 million during the offer period. Across the country, 16 companies were floated.

Funds raised in the IPO period varied from as low as $2.4 million and reached a high of $10 million, with Phosphate Australia Ltd and Malagasy Minerals each raising the larger figure.

Aluminex Resources Ltd also had aspirations of raising up to $10 million, of which more than $5 million was to be spent on exploration programs. But market turmoil dented those ambitions, leaving the company to reach just past its minimum subscription level of $2.5 million.

Also during the September quarter, Buru Energy Ltd came into being following the merger of Arc Energy Ltd and Australian Worldwide Exploration Ltd.

While the market grappled with the extent of the financial turmoil that recently prompted an unprecedented $US700 billion bail out package in the US and a ban on short selling, IPO funds raised over the quarter were higher compared with the June quarter.

During the three months to the end of June 2008, 12 companies listed on the stock market, raising a total of $60.2 million according to data from the ASX.

However, when the 2008 September quarter is compared with the last year's corresponding quarter, the extent of the volatile markets as reflected in IPOs becomes more apparent.

During the three months to September 30 2007, 30 WA companies floated on the ASX, raising nearly $540 million. Most of the companies floated then were classified in the resources sector, an industry that proved to be a magnet during the 2008 September quarter.

However, the resources sector did not prove to be as resilient as some may have previously suggested, with two companies postponing listing plans.

Manganese miner OM Holdings Ltd had planned a secondary listing on the Hong Kong Stock Exchange last month but was forced to delay the float due to adverse market conditions.

Straits Resources Ltd, which planned to float its coal arm, Straits Asia Resources Ltd, on the ASX, offered the same reason for its float delay. Straits Asia is already listed in Singapore.

Pankaj Oswal's Burrup Holdings Ltd officially withdrew its $2.5 billion ASX listing application. The company's float plans have been delayed twice with the latest hold-up courtesy of the explosion at the Varanus Island gas facility in June.