It is truly a tremendous day to be an ASX trader, and that’s because the national bourse’s IPO boards already look healthier after a recent move by ASIC to cut the red tape facing new entrants.
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I don’t know about you, but this Week 24 news has got me particularly bullish.
Ever since the modern plague that was the COVID-19 pandemic decimated global supply chains and then prompted central banks around the world to start raising interest rates, it’s been a hard time to raise capital.
It’s been a hard time to raise capital for everybody, from publicly listed equities to private equity, for local NGOs to state-backed fundraising drives.
That’s all blah blah blah. Here’s the good news: Right now, no less than nine companies are planning to list on the ASX in the near future.
That is, by all means, a very good news day. Recently, there was only one company preparing to come on board at all.
Why has ASIC changed the rules?
In short, because the IPO market down under has been lacklustre, to put it lightly – something I’ve not attempted to hide. I’ve been going on about it since late 2023.
(In fact, the whole of HotCopper has been talking about it for a while.)
The ASX being busy is itself a key indicator of the health of the bourse overall, and one obvious way to measure at least partial market enthusiasm for investment, broadly, down under, is our IPO market.
In other words: Are companies still looking at Australia as a good place to list a publicly held company? In recent history, one has been left to suspect that, no, maybe it isn’t.
So ASIC’s red tape slash comes at a very good time.
What’s actually changed?
Foremostly, the ASIC rules make it easier for companies to tap retail investors in the early stages of raising: An idea HotCopper had long before the regulator. But it’s good to be vindicated.
“Creating a more streamlined IPO process underscores our commitment to ensuring our public markets remain attractive to companies and investors,” ASIC chief Joe Longo said.
“Our initial public offerings are the lowest they have been in over a decade, and companies are de-listing.
“Greater deal certainty for companies should help deliver more IPOs, which means more investment opportunities so companies can expand, increase jobs and ultimately economic growth.”
Good news comes after Robex launch
To make matters brighter, late last week, we saw the launch of Canada’s Robex Resources. In true ASX fashion, that company’s a West African gold miner.
The big takeaway is that Robex didn’t just look to raise something like $7M at 20cps (although, that in itself isn’t a bad thing.)
Robex has raised $120M to issue Australian CDIs at A$3.11/sh. Okay, so maybe not a true IPO – CDIs are just an international company’s way of listing on the ASX with fewer headaches – but the fact that a large miner has faith in Australia’s resources investor base is a good thing.
Perhaps more exciting is that five companies are set to list this month.
You can check that list out here.
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