The ASX welcomed the newest player to the bourse on Thursday, Gemlife Communities (ASX:GLF), a company offering luxury resorts to Australians over 50 to retire in peace.
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With the stock up +5% on its debut, it’s another company that’s been welcomed with warm arms.
In a country where mining jobs in WA and finance jobs along the east coast (as well as overpaid public servants) have driven up the median and average national wage; the notion of retiring in luxury resorts, for many, isn’t so unrealistic.
(I would argue, in contrast to some other market commentators on Thursday, this puts Gemlife some distance away from offering “housing availability.” But still, I see the point.)
Those who can afford Gemlife’s offerings can likely afford anything else reasonably attractive.
Also helping matters is Gemlife is family-owned (read: likely to be aggressive against any takeovers, whether hostile or not), it’s an established business, and it’s hitting the market with a market cap over $1 billion.
It also plays into easy-to-understand larger macro thematics: Australia’s population is growing, we’re a country of high wages (on paper), and, most importantly, our population is aging.
That’s the real story here for the company. But Gemlife’s listing comes at an interesting time: Right at the start of another IPO cycle, which has likely been accelerated by recent rule changes that speed up the listing process.
So really, Gemlife is perhaps the lucky beneficiary of a crucial juncture in ASX market history following what has been a post-plague IPO market drought, worrying enough to prompt ASIC and the ASX to wake up to what’s going on.
After all, we don’t need our bourse to get any smaller relative to America’s than it already is. Also helping matters, without doubt, is that Gemlife’s float is backed by JP Morgan, the world’s largest bank by market cap.
At any rate, regardless of tailwinds, many analysts and market watchers predict we’re at the beginning of a new cycle.
The fact that Gemlife reportedly tapped the ASX on the shoulder to try out some of its new fast-track policies for its own listing only adds to that view.
It will, of course, take a couple of months to figure out if we’re really at the start of a new “cycle,” or if what we’ve seen in recent weeks – a sudden flurry of new IPO floats – is just the result of operators eyeing the RBA cash rate cut trajectory.
It’s true to say we’ve had some pretty massive floats so far. Virgin, Greatland, and Gemlife are all examples. But these companies also have superior advantage – a billion-dollar market cap offers safety, not risk, and so perhaps it was lucky Tetratherix listed in a year we’ve seen a biotech upswing broadly.
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Companies as small as Linq Minerals and as large as La Trobe’s Private Credit Fund float haven’t been so lucky, though; there are considerations there for both (which I discussed in this week’s HotCopper Wire podcast).
GLF last traded at $4.37/sh.
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