2015 IPO Winners and Losers (So Far)

Deloitte has just released an update on Aussie IPOs. It seems that initial public offerings on the ASX are bucking the general trend. That is, we’re investing more confidently in new companies than existing ones. Though still with a fair amount of caution.

Floats raised $2.5 billion in the first half of the year. There were 30 new listings. That’s eight more than the first half of 2014. But each IPO raised less. In 1H14, $4.6 billion was raised.

Companies listed in 1H15 returned more (19.1%) than those in 1H14 (7.3%).

Deloitte sees some tough times ahead for upcoming IPOs. It’s all down to volatile world markets. When the Fed raises rates later in the year, they expect investors to pile their money back in to the US. This won’t hurt Australia too much. But it will make financial markets much more volatile.

ASX listings  by sectors 1H15
Source: Deloitte
[Click to enlarge]

Most newly public companies in 1H15 were from the tech, media, ICT, financial or property sectors. Financial services companies raised the most money (21% of listing values), to the surprise of no one. One of the largest IPOs was the Eclipx Group [ASX:ECX], which does vehicle leasing. It raised $550 million. But so far, most of the top performers have been tech companies. Like dark fibre network provider Superloop [ASX:SLC].

Performance of 1H15 IPOs
Source: Deloitte
[Click to enlarge]

Ian Turner, Deloitte’s Head of Transaction Services, commented on the update. ‘2014 listings have continued to build on their performance and significantly outperformed the ASX. Despite global volatility, we are seeing strong investor confidence given the quality of IPOs — you only have to look at the 1H 2015 listings and their impressive performance,’ said Turner.

What’s coming up?

Deloitte says there’s a ‘very healthy pipeline’ of IPOs for the rest of the year. There are about 40 to go in the next six months.

About 20 have made their official applications, and 14 have set proposed listing dates. Next Tuesday, there’s Traditional Therapy Clinics [ASX:TTC], profiled here. Then on Thursday, there’s Future Generation Global Investment Company Limited [ASX:FGG]. FGG seems to have an interesting concept behind it. Basically, they’ll invest in funds with exposure to diversified international equities. The fund managers have actually agreed to forego all their management and performance fees — more than 1% of assets’ worth. FGG will donate 1% of their assets each year to charities with a focus on supporting children at risk. Especially mental health charities, like headspace and Beyond Blue. The difference between the 1% and the foregone fees will be ‘for the benefit of shareholders’. So either reinvested, or as dividends.

Wondering how to assess a potential addition to your portfolio, without much independent analysis? There are a few ways you can make it easier. Money Morning editor Sam Volkering explains all in his free report.

It’s titled ‘The At Home Investors Guide to Profiting from Australian Small-Caps’. Sam’s report applies equally to IPOs as to established small-caps. After all, with the exception of behemoths like the Medibank Private IPO, most IPOs are small-cap.

In this report, you’ll discover Sam’s simple yet smart four step guide to small-cap success. It’s a strategy that will help you find and assess the best small-caps. Before they hit the radar of mainstream investors.

It’s a must read if you want to prepare yourself for the next four to six months of IPOs. Find out how to download your free copy today.

Eva Mellors,
Contributor, Money Morning

Money Morning Australia