Despite the buoyancy in the stock market over the past 12 months, we have been surprised to see so few new businesses apply for listing on the Australian Securities Exchange.
Rising markets, maturing term deposits and low cash rates are a good recipe for companies with IPO plans. Investors, who are likely to be more open about putting their hard-earned savings to work, rather than reinvesting them in low yielding term deposits, may be keen to take on a little more by investing in companies that are angling to take the IPO plunge.
On the other side of the fence sit the investment managers. Having watched a rising market lift all the “boats” in their portfolios, they are now finding it much more difficult to generate new ideas, and they would certainly be receptive to new opportunities.