Australia’s capital markets raised a record $60 billion of new equity during the 2008/09 financial year, defying expectations of a funding squeeze, says business advisory firm KPMG.
KPMG said that despite turbulent trading conditions Australian capital markets managed to raise record levels of new equity.
“In one of the more turbulent trading periods of recent decades, Australian capital markets proved to be resilient,” KPMG said.
“Over $60 billion was raised during 2008/09, the vast majority from rights issues and private placements.”
KPMG national head of mergers and acquisitions Rob Bazzani said placements vastly outstripped initial public offerings (IPOs) as a source of equity raising in the financial year just ended.
KPMG research found that less then 30 IPOs occurred during 2008/09 with under $300 million raised in total compared to billions in previous years, reflecting a more risk-averse investor market for new company raisings.
Mr Bazzani said mergers and acquisition (M&A) deals were predicted to rebound in 2009/10 as liquidity improved, risk and pricing became more balanced and attractive asset value was recognised.
He said M&A deals would be driven by the financial services sector as well as resources and energy sectors, particularly if commodity prices continued to respond to a recovery in Chinese demand.