The number of small companies listing on the Australian Securities Exchange (ASX) has dropped dramatically, a new report has found.
The study by accounting firm HLB Mann Judd, which works on many initial public offerings (IPOs), revealed the overall number of public floats also dropped dramatically. The report noted a noticeable shift towards larger IPOs.
Alongside commentary that mining investment is easing, HLB Mann Judd also found that mining and energy companies made up 35 per cent of new ASX listings in 2013 – a marked drop compared to 83 per cent in 2012.
HLB Mann Judd partner Marcus Ohm told ABC there had also been a shift in the type of companies floating on the stock exchange. Last year there were 15 industry sectors represented in new listings, compared to seven the previous year.
The study found 30 out of the 49 newly listed companies were small companies (under $100m market capitalisation) in 2013, compared to 92 small cap listings in 2011.
Small caps made up 61 per cent of the total last year compared to 93 per cent of total listings in 2012.
“The small cap sector has struggled quite a lot, especially the resources sector in Western Australia this year, and that historically has been a big contributor to the numbers,” he said.
The report said that was because of the “tough conditions facing market aspirants at this end of the market.”
Ohm said that off that off the back of forecasts that commodity prices and investor sentiment may not recover this year, it could be “another lean year for IPOs at the small end of town.”
Last year, the corporate watchdog – the Australian Securities & Investments Commission (ASIC) – identified problems with one third of company prospectuses before they listed.
The report noted that tough market conditions meant the number of new listings in 2013 was well down on previous years.
Overall, 2013 saw 49 companies float on the ASX – up from 46 companies in 2012. To compare, 104 companies listed on the stock exchange in 2011 and 96 in 2010.
