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Victoria

Event Recap: Initial Public Offerings - Understanding the Market

24 August 2016

In partnership with HLB Mann Judd, ACBC Victoria welcomed two expert guest speakers to present on the topic of initial public offerings and the Australian and Chinese markets.

Our first speaker, Mr Tim Rocks, Head of Market Research and Strategy at BT Investment Solutions, Westpac Group, focused primarily on recent developments in China and the opportunities this presents for Australia. Tim began by highlighting that many investors look at the bigger picture with regard to China and the full opportunities while overlooking an increasingly fascinating micro picture of the country.

One of the recent advances in China stressed by Tim was the One Belt, One Road initiative launched by President Xi in 2012. Drawing funding from the Asian Infrastructure Investment Bank, it aims to pump $1 trillion in investment into significant infrastructure projects over the next 10 years. A key element of this initiative includes a high speed rail link running from Beijing to Berlin, reducing the travel time of freight from 40 days to 20 hours. Additionally, as a part of the development of new maritime routes, China is also discussing the possibility of building the world’s third great canal through southern Thailand, reducing China’s reliance on moving freight through Singapore.

Tim’s presentation continued by outlining specific opportunities for Australia. These include tourism, education and food and skin care. When looking at the market leaders in terms of China engagement, all of them have been able to tap into the specific demands of Chinese consumers. Tim concluded by stressing that ensuring Australia’s capacity to meet the demand in the above areas and an ability to utilise e-commerce platforms will be crucial to capitalising on the present opportunities.

The focus shifted more specifically towards IPOs with the presentation from Mr Jude Lau, Partner at HLB Mann Judd. Jude covered IPO activity in 2015 and in the first half of 2016, providing insight into the number of IPOs occurring and in which areas. 2015 saw 85 new IPOs with the funds raised being strongly influences by larger cap offerings. There was also a greater diversity amongst the offerings with new market entrants from 21 different sectors including technology, investments and healthcare. In the first half of 2016 33 new listings occurred exceeding $75 million in market capitalisation. Smaller listings have delivered similar returns to larger ones and technology, media and telecommunications have led the way with 12 listings.

Jude concluded by emphasising the positive outlook for Chinese IPOs on the ASX, describing the ASX as designed for growth companies. The presentations were followed by an engaging Q&A session and further networking opportunities.

We kindly thank our speakers, Tim Rocks and Jude Lau for their time and expertise and also extend our thanks to HLB Mann Judd and Mr Josh Chye for generously hosting the event.