* Australia IPO deals set to rise six-fold to about $6 bln
* Fees for underwriting Australian IPOs up 10-fold this year
* Bankers predict busy IPO market next year, potential for
By Elzio Barreto and Jackie Range
HONG KONG/SYDNEY, Dec 9 Bankers in Australia
have much to cheer this Christmas as fees from underwriting IPOs
surge 10-fold this year, and many are now betting on an equally
active year in 2014 as a slew of private equity exits keep the
Before the year ends, 14 more companies are due to start
trading on the bourse after raising almost $1 billion in total.
That would take the 2013 tally to about $6 billion, a six-fold
jump from last year and the highest since 2010, according to
Thomson Reuters data.
The rush of listings, most of which are concentrated in the
last two months of the year, have led some bankers to predict an
initial public offering pipeline of at least A$6 billion ($5.46
billion) next year, defying a slowing domestic economy weakened
by falling commodity prices.
The resurgence follows two lean years in 2011 and 2012 when
investor appetite for new issues slumped due to global economic
uncertainty and a rash of poor secondary market performances.
"In Australia, we've been through a series of interest rate
cuts... and that combination of historically low rates plus
confidence around the global growth picture as well as lower
volatility has attracted a lot of investors back into equities,"
said Hugh Falcon, co-head of equity capital markets for
Australia and New Zealand at Macquarie Group Ltd.
The Australian IPO market has been the third-busiest in the
Asia-Pacific region - behind Hong Kong and Singapore - rising
from the 10th place in 2012, Thomson Reuters data shows.
The estimated fees from underwriting IPOs in Australia has
jumped to $110 million this year, according to Thomson
Reuters/Freeman Consulting, with home-grown Macquarie dominating
the league table followed by Swiss bank UBS AG.
"The challenging environment of the last four or five years
meant the IPO windows that have occurred were very short. This
has meant we have witnessed a lot of pent-up demand from issuers
to go to market in recent months," Falcon said.
For investors, buying into new listings has been more
profitable than betting on already listed companies, further
Companies such as OzForex Group, Veda Group
and Steadfast Group have risen more than 40
percent from their offer prices. That compares with a 11.6
percent gain in the benchmark index this year.
Packaging company Pact Group is due to list on
Dec. 17 after raising A$649 million in Australia's biggest IPO
this year. The second-largest was Nine Entertainment Co Holdings
Ltd, which made its market debut on Friday.
Travel insurer Cover-More Group, seeking to raise A$521
million, plans to start trading two days after Pact.
On Monday, education training provider Vocation Ltd will make its debut after raising A$253 million by
selling shares at A$1.89 each.
There are some concerns the Federal Reserve will call an end
to easy money in the United States, and worries about the
outlook for the Australian economy.
The Reserve Bank of Australia predicts growth will stay
subpar at around 2.5 percent through 2014 before hopefully
picking up in 2015 as exports and domestic demand help offset a
cooling mining boom.
Among the companies expected to list next year include
government-owned insurer Medibank Private and healthcare
business The Healthscope Group, owned by private equity funds
The Carlyle Group and TPG Capital Management, according
to a banking source.
Facilities management outfit Spotless Group, owned by
Australian private equity fund Pacific Equity Partners, is also
expected to launch an IPO, the source said, adding those offers
could potentially raise more than A$1 billion each.
The long-delayed $3 billion IPO of Hong Kong utility CLP
Holdings Ltd's Australian unit TRUEnergy is another
possible deal, bankers say.
"Next year there is potential for a lot more floats and a
lot bigger floats, and I think the deal size is the key point of
difference," said Sean Walsh, head of equity capital markets for
Goldman Sachs in Australia.