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Equity capital markets post significant dip in 2022

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So far this year, Australian companies have raised less than half of the amount garnered in 2021.

Australia’s equity capital markets raised a total of US$6.4 billion ($9.3 billion) in the first half of 2022, down 60 per cent compared to the first half of 2021.

Data from Refinitiv indicated that companies domiciled in Australia raised US$473.2 million ($687.0 million) via an initial public offering (IPO) as of 21 June, a fall of 87.1 per cent on H1 2021.

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Additionally, a total of US$5.9 billion ($8.6 billion) has been raised via follow-on offerings, representing a fall of 42 per cent versus the previous year.

Mining technology company Chrysos Corporation raised US$129.6 million ($187.9 million) via an IPO, the biggest IPO issuance from an Australian issuer so far this year, according to Refinitiv. 

Meanwhile, Woodside Energy Group’s US$804.6 million ($1.1 billion) block trade saw it rank as the largest Australian equity raising to date in 2022.

Issuers from the materials sector dominated and accounted for nearly half of the market share with US$3.1 billion ($4.5 billion) in proceeds, followed by the energy and power (18.2 per cent) and financials (9.5 per cent) sectors.

M&As hit record high

Turning to mergers and acquisitions, Refinitiv indicated that M&A activity with Australian involvement reached US$103.5 billion ($150.0 billion) during the first half, up 25.4 per cent on a year ago and the highest level since records began in 1990.

The firm reported that at least four deals with a value above US$5 billion ($7.3 billion) were announced in the first half with a cumulative total of US$52.4 billion ($76.0 billion).

Inbound M&A activity surged 73.6 per cent to US$38.9 billion ($56.4 billion), the highest ever first-half period, and outbound M&A jumped 167.9 per cent to US$33.2 billion ($48.2 billion).

Domestic M&A activity dropped 37.1 per cent to US$26.6 billion ($38.6 billion) while target Australia M&A lifted 1.3 per cent to US$65.4 billion ($94.8 billion).

“Acquisitions from the United States captured 70.0 per cent market share of Australia’s inbound activity and totaled US$27.2 billion, more than double the value from a year ago,” Refinitiv said. 

“By value, the United Kingdom takes the top as most targeted nation for Australian acquisitions which accounted for 43.8 per cent market share, while the United States saw the highest number of acquisitions from Australia with 27 deals worth US$11.6 billion, up 164.2 per cent in value compared to the first half of last year.”

The healthcare sector accounted for a 23.4 per cent share of the deal making activity involving Australia at US$24.2 billion ($35.1 billion), driven up by the US$22.1 billion ($32.1 billion) pending takeover bid of Ramsay Health Care led by KKR & Co.

Based on preliminary data, Refinitiv reported that Barclays was on top of the investment banking league table for Australian-involvement announced M&A with a 34.9 per cent market share worth US$36.1 billion ($52.4 billion).

Equity capital markets post significant dip in 2022

So far this year, Australian companies have raised less than half of the amount garnered in 2021.

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Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.

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