Speaking at the exchange’s annual general meeting on Monday, Lofthouse shared that although global IPO activity remains subdued, “green shoots” are appearing, with 15 new listings recorded in the first quarter of FY2024–25.
Key entrants this year include Webjet Group post-demerger, Bhagwan Marine, and a dual listing from Alcoa.
Lofthouse added that several other companies have also hinted at potential ASX listings in the near future, signalling growing confidence in market conditions.
The ASX’s contraction has been noted for months, with recent data highlighting a dramatic shift in Australia’s investment landscape with public listings dropping from 2,219 to just 2,124, mirroring a global trend where the appeal of public markets is rapidly waning.
According to the ASX Group’s most recent activity report, the market operator has seen just 15 new listings in the 12 months to 30 September, while 46 entities have delisted from the exchange.
But while analysts see this as a sign of a larger shift in how companies choose to grow and access capital, Lofthouse believes an uptick is due on the back of better macro conditions.
“Many of the trends that we saw in late FY24 continued into the first quarter of FY25,” she said.
“More normalised macroeconomic conditions appear to be supportive of an increase in listings activity, although ongoing geopolitical instability could further impact sentiment. It’s important to note that there is a lag between these more favourable conditions and IPOs taking place, while issuers work through the process to fulfil their listing obligations.”
More broadly, the CEO shared that the ASX has seen $411 billion of net new capital quoted on the ASX over the seven years to September 2024, which, she said, demonstrates the long-term attractiveness of our market.
Reflecting on the first quarter of FY24–25, she added: “Total cash market trading value was up by 11 per cent in the first quarter of FY25 as offshore macro events, including central bank rate cuts and speculation around further economic stimulus in China, drove an increase in volatility.”
The ASX’s financial statement for FY23–24, released earlier this year, revealed that cyclically, lower capital markets activity impacted its listings business, with total revenue for the division down 4.8 per cent to $208.2 million.
Initial public listings (IPO) also faltered, down from 57 recorded in FY22–23 to 56 in FY23–24, coupled with an elevated number of delistings from 119 to 156.
Despite the data, ASX’s manager for listings earlier this year assured that after a quieter period, optimism abounds as the cyclical nature of IPO activity gears up for a resurgence in the second half of this year, with momentum carrying into 2025.
In a piece published on the ASX in July, Kate Galpin said: “After an extremely busy 2021, it has been relatively quiet over the past couple of years, similar to 2011–12, but the IPO market is cyclical, and activity will return.
“Headwinds caused by uncertainty around inflation and increasing interest rates played a role in reducing the number of new listings globally last year, and ASX was no exception with some highly anticipated IPOs deferred.”
Others, however, believe the shrinking size of public markets is a sign of a greater update of private markets.
Martin Donnelly, managing director of client relations at EQT Capital Raising, recently explained that rising costs and complexities of going public are some of the key considerations, pushing companies to opt for the private capital route, coupled with stricter regulations, increased compliance requirements, and greater scrutiny from stakeholders making the public market less attractive.
“Private markets have evolved into a vital part of modern investment strategies, not only for portfolio diversification but also as a driver of sustainable, long-term wealth creation,” Donnelly said.
“With fewer public companies to choose from, investors can no longer rely solely on public markets for growth. By tapping into private capital, they can gain access to innovative sectors and high-growth opportunities that offer more resilience and less exposure to market volatility.”
According to the ASX, total new capital quoted in September was $6 billion, compared to $7.3 billion in the previous corresponding period.
Across the pond, the number of publicly listed companies in the US has plummeted by nearly 50 per cent over the last 25 years, highlighting that ASX’s own contraction is not a singular trend.
Similarly, the London Stock Exchange has seen a reduction of more than 15 per cent in listings over the past decade, according to EQT.
