A year-to-date analysis of the performance of the initial public offerings (IPO) for 2017 has revealed companies that floated on the Australian Securities Exchange (ASX) for the first time have generated an average return of 25.9 per cent for the nine months ended 30 September.
“The ‘OnMarket 2017 Third Quarter IPO Report’ illustrates that crowdfunded IPOs are delivering capital to companies and outperformance for self-directed investors, with the average year-to-date return of 25.9 per cent easily eclipsing the 0.3 per cent achieved on the S&P/ASX 200 Index over the same period,” OnMarket managing director Tim Eisenhauer said.
The study also showed the number of IPOs in 2017 had experienced a 37 per cent increase compared to the first three quarters of 2016. In all, 78 companies have listed this year, while 57 had done the same at 30 September 2016. However, despite this increase in initial listing volume, the report revealed the capital raised has fallen from $4.8 billion to $2.6 billion. It means the average capital raising for 2017 is $33 million as opposed to $84 million in 2016.
According to the analysis, the materials sector has been where the most IPOs have occurred, with 28 of the 78 newly floated companies, or 36 per cent, coming from this space. The July to September quarter reinforced this trend, with nine out of 19 IPOs, or 47 per cent, arising from the materials industry.