It's now nearing March and there is, understandably, some concern re the IPO market with a number of companies already canning their listings.
In January there were high hopes. For example an article in the Australian Financial Review by Anthony Macdonald "TRUenergy to head $25bn IPO crop" states that there will be an estimated $25 billion in initial public offerings for investors in 2012.
This forecast was a significant increase on the shocker that was last year with only 67 companies crossing the finishing line and raising in total $1.64 billion.
Of the 104 IPOs last year eighty-eight were resource related with the median raised a low $4.9 million.
2011 was the worst results in ten years and just behind 2001 which had 35 listings raising total of $760 million - ouch!
But nearly three months into the year has the optimism decreased? Well bankers are anticipating that IPOs will be moved back into the second half of the year.
According to an article by Tony Featherstone in AFR today "more resource companies are withdrawing listing applications or struggling to close their offer".
This time last year 17 explorers had listed compared with just seven this year. That's despite a stronger sharemarket and the mining investment
boom.
Only six of 18 current resource IPOs still have confirmed
listing dates whilst others have extended. Some may have to cancel due to being unable to secure the minimum required subscribers.
Writes Featherston "Investors, it seems, have exploration IPO fatigue, at least for nano-cap miners"
"Risk-averse retail investors, weakness in small resource stocks last
year, and the sheer number of exploration IPOs and competition for
investor funds, has turned a difficult float market into a wretched one
for many mining hopefuls"
"Coal, African gold and mining-services floats have been bright spots in
an otherwise dreadful IPO market over the last three years" writes Featherstone.
Featherstone warns that 2012 could be even worse than 2011. And that there will be "fewer but larger established
mining IPOs with advanced projects. The value of resource IPOs may be
well up on last year, despite sharply lower listings."
Maybe that's an indication that the companies need to be more creative and resourceful?
And they need to push the positives to the retail investors.
Ten years ago international economist, Ken Courtis, forecast to a Canberra audience a vast
mining boom and the Australian dollar moving to parity with the US
dollar within 10 years.
That seemed unlikely at the time with the Australian dollar at
US52¢
So naturally we are very interested in what he is now forecasting. He beliees the world financial markets are going to be "ugly" in the months ahead and commodities are about to hit a short term peak.
But he advises against panic selling
gold, energy, mining or food investments.
''We will look back and say to ourselves, 'why didn't we
buy gold when it was only US$1900 an ounce?''' says Courtis.
Gold was trading for $600 an ounce a few
years ago but as of late 2011 it had increased to $US1880 an ounce.
States Courtis "The great surge in commodity prices has only just begun
and the past decade is only the precursor to the next."
This can only be a positive sign for the many resource companies seeking to list this year.
http://afr.com/p/business/companies/truenergy_to_head_bn_ipo_crop_fwNCJ6TR2oL2LVxIMAKHiK
