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Floats, floats, floats!

Thinking of owning a piece of the action? Well, now could be the time as approximately 40 new entities are expected to list on ASX before the end of this calendar year. And not only have we seen an increase in the number of companies wanting to raise capital through shares in the last few months, but there have been noticeable increases in the number of mining & resources, financial services, investment companies, property trusts and interest rate securities listing on ASX.  This article looks at the renewed interest in upcoming floats on ASX.

Up until October, ASX had 69 listings which raised around $3.9 billion worth of capital. In the next two months around 40 new entities will list and hope to raise the same amount of capital. Some of these larger floats you may already have heard of including:

  • Australian Leisure & Hospitality Group Limited ($881m) and ALE Property Group ($212m) (both spin-offs of the Fosters Group);
  • Multiplex Group ($900.9m);
  • Repco Corporation ($405m); and
  • Macquarie DDR Trust ($547.8m).

After a relatively quiet three year period, listings of mining and resource companies are also increasing. In the last three years there have been over 50 new mining and resource companies list on ASX and already this year we have seen another 18 list with around 18 more expected before the end of the calendar year. 

Listed Managed Investments
Another area we have seen a new wave of activity recently is Listed Investment Companies (LICs) and other listed funds.  LICs in particular have become attractive after posting impressive returns throughout the bear market. The recent launch of the Wilson Investment Fund which sought to raise $150 million was heavily over subscribed.

Seven new funds are currently in the listing pipeline. They include:

  • Brickworks Investment Company, an investment company of Australian shares that uses a style neutral philosophy and focuses on increasing dividends over time;
  • MMC Contrarian, an investment company focused on out-of-favour Australian shares;
  • Clime Capital Ltd, an investment company of Australian shares (excluding resources) with a concentrated portfolio, utilising a long-term valuation driven philosophy;
  • Wilson Leaders Fund, focusing on the top 100 Australian companies, this investment company uses a fundamental qualitative analysis to identify between 25 - 40 holdings.
  • Premium Investors, an investment company focusing on Australian shares, managed by multiple boutique fund managers with an absolute return focus;
  • IncomePlus, is a more exotic investment option.  This hedge fund uses gold and interest rate securities to produce income.  Last year they produce a return of 50% making IncomePlus the best performing hedge fund in Australia; and
  • GEC's Australian Healthcare Fund, managed by Ausbil Dexia to provide exposure in the healthcare, pharmaceuticals, and biotechnologies sectors.

Interest Rate Securities
Reset Convertible Preference share issues have continued to be the most popular style of Interest Rate Securities issued on ASX. These securities are popular with issuers as they provide fixed cost equity, and popular with investors because of their fully-franked return. 

So far this year, 24 new issues of Interest Rate Securities totalling $3.6 billion in capital raisings have come to the market place with a further 5 scheduled for November and December. These new issues have come from companies such as Insurance Australia Group (IAG), the Seven Network Limited and the ANZ Bank. 

Upcoming Interest Rate Security issues include:

  • Toll Holdings Limited 5.59% Resettable Convertible Preference Share ($250 million); 
  • Australian Food Fibre Limited 4% Convertible Note ($15.5 million);
  • A.B.C. Learning Centres Limited, 6.75% Convertible Preference Share ($60 million);
  • Leighton Holdings Limited, 7.70% Convertible Note ($200 million); and
  • ALE Property Group's 6.58% Corporate Bond ($150 million)

If you are interested in finding out more about upcoming floats please see the links at the top of this page, call ASX Customer Service on 131 279 or ask your stockbroker/financial advisor.

ASX is interested in your thoughts, please email any comments or feedback on this article.