* Australian IPOs on track for best year in over a decade
* Capital raised five times more than this time in 2013
* Makes floats more attractive for Healthscope sale
* Australia provides bright spot for IPOs in Asia-Pacific
By Byron Kaye
SYDNEY, June 2 Australian businesses have set a
new record for money raised in public floats in the first five
months of the year, with larger deals to come putting the
country on track for its biggest IPO year since the Telstra
privatisation began in 1997.
Companies have raised $2.89 billion in sharemarket
flotations in the year to the end of May, more than five times
the amount generated in the same period last year, according to
Thomson Reuters data.
That makes Australia a bright spot in the Asia-Pacific
region generally, where dozens of deals have been cancelled or
withdrawn amid volatile equity markets, unrest in Thailand and a
cautious approach to approvals in China.
Australia's sharemarket meanwhile is trading at all-time
highs, buoyed by historically low interest rates, and recently
listed companies like cleaning and catering firm Spotless Group
Ltd, which raised A$995 billion ($920.28 billion) in
May, have posted strong after-market performances.
Analysts say this is encouraging vendors to go to the market
as opposed to selling privately, particularly private equity
firms which are looking to exit mature assets they have been
holding through less favourable years.
"People keep having these good experiences, they keep
looking for the next opportunity to invest in," said Andrew
Stevens, joint head of equity capital markets at UBS,
which managed Australia's two biggest floats of the year so far
- Spotless and Genworth Mortgage Insurance Australia Ltd
Stevens is working on a possible float of Healthscope Ltd, a
hospital owner and operator worth an estimated A$4 billion which
is owned by U.S. private equity giants TPG Capital Management LP
and Carlyle Group.
The owners are expected to decide this month whether to sell
via float or privately.
Another float that could fetch A$4 billion is the planned
sale of state-owned health insurer Medibank Private, due to list
before the end of June next year.
If both proceed in 2014, the year will be the biggest for
Australian IPOs since 1997, when the government began its
sell-down of telecom Telstra, the Thomson Reuters data
John McLean, the head of capital markets origination at Citi
in Sydney, said that rather than being a bubble, the rush of IPO
activity was due to a cocktail of previously withheld supply and
the quality of businesses that are on offer.
"I don't think it's too good to be true ... We've had fairly
subdued levels for a number of years, other than the second half
of last year," he said.
IPO activity in broader Asia remained subdued "so Australia
has become a bit of a highlight regionally", he added.
The reopening this year of equity markets in mainland China
after a 14-month hiatus and increased activity in Hong Kong is
set to boost listings in the region, although initial
expectations for a boom in China IPOs are being scaled back as
regulators have been tentative about approvals.
IPOs in Singapore have had a slow start while in Thailand,
where the military launched a coup last month, volumes have
plunged in the year to date.
In Australia however capital raised in IPOs so far in 2014
is more than that raised in all of 2011 and 2012 combined.
($1 = 1.0812 Australian Dollars)
(Editing by Stephen Coates)