Investors still keen on floats

Investors can expect more company launches in 2018 than there were last year. Already the number of initial public offerings in the pipeline sits at 37 companies, which are seeking to raise $603 million compared with 23 ($207 million) at this time last year.

Materials and technology make up the bulk of the IPOs. The largest is Third Party Technologies.

The listings come on the back of 110 IPOs in 2017, with the share price of those companies rising by an average of 46% by the end of the year. They raised $4.1 billion.

Marcus Ohm, a corporate and audit services partner at HLB Mann Judd Perth, says investor sentiment is positive, with 79% of listings meeting or exceeding their targets.

The top-performing stock in 2017 was Ardea Resources, which listed at 20¢ in February and rose to a high of $1.99 before ending the year at $1.90. Wattle Health and Cann Group both gained excess of 800%.

Small cap IPOs (under $100 million) made bigger gains than mid-size companies. According to the latest HLB Mann Judd IPO Watch, out of the 110 listings 88 were small caps – up from 64 in 2016 – and they made an average of 56%. The biggest sector was materials, with 28 small cap listings, followed by software and services (10 small caps) and technology hardware and equipment (six).

Top IPO performers were pharmaceuticals, biotechnology and life sciences, up an average of 188%. Technology hardware and equipment listings rose 167%. Food and beverage listings were up 109% and diversified financials 86%.

Listings in the investments sector, which included one of the only large IPOs, Magellan Global Trust, were up an average of 6%.

The underperforming sector was utilities, falling by an average of 4%.