The latest research report into initial public offers (IPOs) by private companies has shown the activity fell by 72 per cent in 2008 when compared to the previous year.
The HLB Mann Judd IPO Watch 2008 revealed there were only 68 new floats during the whole of last year, 177 fewer than the total initial floats conducted in 2007.
Furthermore, almost three quarters (73 per cent) of the new floats undertaken in 2008 occurred in the first half of the year, meaning new listings were almost non-existent when the bear market conditions prevailed.
“Between October and December 2007 there were over 80 new listings, but in 2008 there were only 68,” HLB Mann Judd director corporate finance Geoffrey Webster said.
“The second quarter of 2007 also had a larger number of listings (over 70) compared to all of 2008.”
Funds raised through IPOs were also significantly lower than in the previous year, with $780 million generated in 2008 compared to $8.43 billion in 2007. This drop represented a 91 per cent decline in funding produced.
IPO activity in 2008 was dominated by one sector, with small cap companies making up the lion’s share of new listings.
“Small cap companies contributed 60 per cent to total funds raised (93 per cent of new listings), compared to 2007’s figure of 22 per cent of amounts raised (88 per cent of new listings),” Webster said.
“In fact, there were only five large cap listings in 2008, compared to 30 in 2007, with a historically small amount of fund raising between them.”
