The ASX is increasingly a magnet for foreign company IPOs


Foreign companies raising capital in Australia helped the ASX last year launch the largest number of IPOs since the GFC.

Overall, the exchange had 115 new listings in 2017, raising $6.7 billion of capital, compared with 94 in 2016 and 97 in 2015.

The market capitalisation was $11.1 billion and the weighted average performance for the year was 36%, well ahead of the general growth of 7%.

According to Deloitte’s latest annual IPO review, the ASX continues to be a magnet for inbound listings of foreign businesses because it offers a main board IPO at an earlier stage than other major markets.

In 2017, 25 foreign listings, up from 22 in 2016, raised $512 million in capital and had a combined market capitalisation of $1.7 billion.

The largest were Oceania Healthcare from New Zealand, San Francisco-based Credible Labs, China-based Eagle Health and Retech Technology, and the German-based construction technology company Pyrolyx AG.

Ian Turner, Deloitte’s National M&A Leader, says the Asia-Pacific region was the stand-out region and performer globally, accounting for more than half of listings around the world, driven by investor confidence on the back of economic growth, supportive macro-economic fundamentals and momentum in equity markets.

Where the foreign IPOs came from:

Source: Deloitte

And the sectors:

Source: Deloitte

“The ASX continues to attract foreign-listed companies looking to tap equity capital markets and remains a capital hub for the Asia Pacific region, with eight new Asian-based listings in 2017 representing 32% of foreign listings by volume,” says the Deloitte report.

“Foreign companies seeking access to capital for growth are drawn to the profile and good standing of the ASX being one of the most prominent exchanges in the region, Australia’s stable political environment, the deep level of trading liquidity afforded from large institutional support, and the robust compliance and governance structures in place.”

Aaron Black, Head of Equity Capital Markets Advisory at Deloitte, says the economic fundamentals look good for IPOs in 2018.

“Stronger economic growth, and lower unemployment, are positives for the IPO outlook,” he sdays.

Capital raising volumes should exceed 2017 if the large mooted floats, including Latitude and Colonial First State, together with the likes of Prospa Advance, take off.