IPO activity in Western Australia climbed sharply in the first nine months of 2006 to top more than $1.5 billion.
IPO activity in Western Australia climbed sharply in the first nine months of 2006 to top more than $1.5 billion.
Deloitte Corporate Finance's latest quarterly IPO survey, released today, found WA generated 55 IPOs in the first nine months of the year, up from 34 in the previous corresponding period.
The value of funds raised also increased sharply, up from $168 million in 2005 to $1,566 million.
The total value of funds raised by IPOs in WA was boosted by the $942 million IPO of heavy machinery company Emeco Holdings - the nation's largest IPO in the September quarter - and the $299 million IPO of Aditya Birla Minerals in May.
At a national level, IPO activity in the September quarter stayed high, with 37 IPOs raising a total of $2.41 billion. This lifted national IPO activity in the first nine months of the year to 110 IPOs with a total of $5 billion in capital raised.
Deloitte Corporate Finance Partner, Hugh Thomas said the resource boom was still not over for IPO investors, despite recent falls in commodity prices and investor nerves about the resources sector.
"IPO activity has been kept high by the resources and related sectors, and by infrastructure floats.
"Almost two thirds of all IPOs around the country in the September quarter were in the exploration and mining business, and most resource IPOs were still producing very positive returns."
Australia's three best-performing IPOs in the September quarter were all resource explorers based in Perth:
- - nickel, copper and gold explorer Redstone Resources (up 180 per cent)
- - gold and base metal explorer Ironbark Gold (up 140 per cent); and
- - gold and nickel explorer Shannon Resources (up 100 per cent).
Mr Thomas said the increasing emphasis on base metals exploration by IPOs in the latest quarter reflected an increasing maturity of the resources boom.
"None of the top five performers in the latest quarter were focused on uranium exploration. The share prices of uranium explorers have cooled since last year's boom, but the sector continues to produce a large number of new public companies."
The 10 biggest IPOs in WA in 2006 raised a total of $1,383 million or 88 per cent of all funds raised.
Share price performances were mixed, ranging from a gain of 90% for engineering contractor VDM Group to a negative return of 46 per cent for oil and gas explorer Central Petroleum. The average share price gain of the 10 largest IPOs since listing was 7 per cent.
Mr Thomas said he expected the flow of smaller capital raisings in the resources and related sectors in WA to continue in the next quarter, although much of the market will be focussed on the long awaited T3 launch.
