Despite a soaring ASX, the Australian primary equity market has slowed down.
Australia-listed ECM volume has plunged 42% to $4.6 billion year-to-date. The number of deals has also fallen. It is down 22% to 196 over the same period, according to data from Dealogic.
It is no better in the IPO market either, which continues to decline after a slight recovery last year. Indeed, the number and volume of flotations have dropped to their lowest levels in five years. Australia has only seen 11 IPOs so far this year raising $230.1 million. This is a 42% drop in volume and 54% fall in numbers compared to the same time period last year.
The weakness in the market can be seen most clearly in the mining sector, traditionally one of the country's most resiliant. Only two companies raising $7.8 million have IPOed so far this year. Compare that to 13 IPOs in the same period last year raising $244.1 million.
The cooldown in mining, has also affected the aftermarket performance of mining companies that have listed recently. 26 out of the 33 mining companies that have listed since January last year are currently trading under water; indeed one of them is trading 88% below its IPO price. No wonder that there appears to be little enthusiasm for mining companies to go public. The trade dispute between China and the US remains another significant reasons why mining companies are thinking twice before they apply to list.
