There are different reasons why a company might be looking to increase its capital, from acquiring new assets to keeping a healthy balance sheet and everything in between.
It’s important for both new and seasoned investors to be familiar with the different options that companies have to raise money and how different methods can impact a company’s share price.
In uncertain times, companies from all sectors and exchanges face challenges in developing their assets, but how can companies listed on the Australian Securities Exchange (ASX) raise cash? The Investing News Network reached out to experts to answer your questions about capital raising on the ASX.
Speaking with the Investing News Network (INN) about capital raising trends seen in Australia, Elaine Tan of Refinitiv said 2020 was a strong year for equity listings in the country across multiple sectors.
According to the firm’s data, the financials sector accounted for the majority of the equity capital raisings in Australia, capturing 20.4 percent of the market at US$7.6 billion, up 30.5 percent from a year ago.
Materials followed behind with a market share of 17.3 percent for a total of US$6.4 billion, an 87.8 percent increase from 2019 and the highest annual total since US$7.3 billion in 2011.
“The sector also saw the greatest number of equity capital market offerings as it reached the busiest-ever annual period in 2020, driven by activity from metals and mining (US$5.7 billion),” Tan said.
IPO activity in 2021 looking ‘promising’
By Jerome Doraisamy|28 February 2021
According to a new report, Australian IPOs will defy early expectations this year, following a record end to 2020.
Herbert Smith Freehills has released its 2020 Australian IPO Review –
A Tale of Two Halves – which covers the key IPO themes and activity from across the Australian market from the last year and predicts the trends expected in 2021.
The report found that the total market capitalisation of entities listed on the ASX in 2020 was around $13 billion, which exceeded the value of listings in 2019 by over a billion Australian dollars, and there were 15 more listings than the previous year.
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GameStop’s lessons for #auslaw
By Jerome Doraisamy|22 February 2021
While the “incredible short squeeze” of stocks in GameStop and other companies may not be replicated in the Australian market, there are still some valuable reminders for lawyers here from this saga.
Last month, retail traders in the US on reddit joined forces to buy stocks in video game retailer GameStop, and then in other companies such as AMC Entertainment Holdings Inc., on the back of hedge funds shorting those companies. The “incredible short squeeze”, as Baker McKenzie partner and head of capital markets Antony Rumboll described it, saw stocks in those companies skyrocket, with retail investors temporarily seeing their investments balloon.