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Hotter than normal: Here’s how the Australian IPO market got its mojo back

The Australian initial public offering (IPO) market is witnessing a frenzied rush by companies to go public like never before, cashing in on bullish trend. The queue of private companies seeking to get listed on the Australian Securities Exchange (ASX) is only getting longer with over 30 companies rolling out their IPO prospectus to make stock market debut this month itself.

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In the first fortnight of July 2021, over 20 companies have already commenced trading on the ASX. As many as eight companies made their debut on the first two days of the month, and eleven were listed in July’s first full week.

While some big IPO stocks such as PEXA, Australian Rare Earths, 29Metals, BlueBet Holdings, Silk Logistics, Charger Metals, Aerison Group have already listed on the ASX, there are over a dozen more lined up to start trading at the domestic bourse.

The surge in the IPO activity comes despite the recent drop in the average listing return by companies. The listing return is the profit generated by the company when stocks are registered at a price higher than the offer price. However, not all stocks generate a positive return on listing as it depends on the prevailing market sentiments.

The ASX IPOs delivered an average listing return of 11% in July, compared with 40% last year.

Among the listings in July so far, the highly-anticipated online property exchange PEXA Group (ASX:PXA) gained just 0.1% on market debut, despite strong fundamentals. The online property settlements firm raised AU$1.18 billion at an offer price of AU$17.13, in what is touted to be Australia’s biggest IPO so far this year.

The recent listees – logistics and freight tech firm Silk Logistics Holdings (ASX:SLH) and battery metals explorer Charger Metals (ASX:CHR) – notched decent gains on their market debut. While Silk Logistics gained 20% on its ASX listing, Charger Metals surged 15%.

Why is the Australian IPO market so hot right now?

The busy month of July is on track to register the highest number of IPOs this year. The recent surge in IPO activity is attributed to favourable market conditions, ample liquidity, and new opportunities propelled by the coronavirus pandemic. At the same time, a low interest rate also augurs well for the fundraising activities as many companies have filed IPOs to capitalise on the record low-rate environment.

The Reserve Bank of Australia (RBA), in the July policy meeting, reaffirmed that it does not expect to start lifting cash rates until 2024 “at the earliest”. The central bank has kept the cash rate unchanged at a record low of 0.1%, despite a recovery in the economy and employment. The apex bank has reiterated its commitment to maintain highly supportive monetary conditions to support a return to full employment and inflation consistent with the target.

Upcoming ASX IPOs

If you are an IPO buff, the next two months are going to be exciting as the Australian equity market will see a surge in the IPO activity. While around 15 IPOs are in the queue for listing next fortnight, five companies are slated to join the ASX in August, as per data available on ASX. However, the number could increase depending on requisite approvals.

Here is a list of the upcoming ASX IPOs. Note that the IPO dates and prices may change, but the companies have received the nod from the Australian Securities and Investments Commission (ASIC) to file their prospectus.

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How Equipment Financing Can Help Your Small Business

Equipment financing can help you buy equipment and machinery for your business expansion. Read further to know more about equipment financing in detail.

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As a business owner, you understand the importance of having the right equipment to run your business smoothly. In most cases, this equipment will need to be replaced and updated frequently.

If you are a small business or a business that requires a large sum of working capital, frequently investing in the equipment and machinery may disrupt your budget and financial plan.

In such a case, equipment financing can serve as a beneficial option. You can obtain these financing options from your bank or equipment financing companies in your area. Let us learn more about equipment financing in detail.

What is equipment financing?

Equipment financing refers to the financial instrument, lease, or loan provided to business owners for purchasing new machinery and equipment. It is especially beneficial for small business owners to scale up their business without disrupting their cash in hand.

Instead of making a lump sum payment for the cost of machinery, they can make manageable periodic payments. These payments consist of the principal amount as well as the interest.

The loan or lease is specifically allotted to secure tangible equipment or machinery but does not cover real estate. The financial instrument usually covers financing of business-related equipment only. However, depending on the terms and policies, some equipment financing companies may also assist with equipment for personal usage.

Equipment financing is offered in one of the two ways.

1. Equipment financing loan

2. Equipment financing lease

Distinguish between equipment financing loan and lease in detail.

1. Equipment financing loan

In the case of an equipment financing loan, you can purchase any equipment or machinery by obtaining a loan from the equipment financing company. The loan value will cover 80% or more of the equipment value. So, you can acquire the equipment by making a small down payment of 20% of the cost of the asset. In some cases, the loan amount covers the entire cost, and you don’t need to make any down payment.

As collateral against the financial loan, the financing company may require a lien on the equipment being purchased. When you repay the loan, you get complete ownership of the property free of any lien. However, failure to pay the loan may lead to repossession of the equipment.

2. Equipment financing lease

An equipment finance lease is a lucrative choice, especially if you want the equipment and machinery for a short duration. This option is more suitable for industries that consistently require an upgrade to the machinery as the old technology becomes obsolete.

You can obtain the property without making any investment or down payment. However, you need to pay fixed rental payments. Leasing equipment is a much cheaper alternative to taking a loan as it does not require you to pay high interest.

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Everything You Need To Know About A Financial Advisor In Billericay

Financial advisors are professionals who first prepare a plan that they may put into use in order to fulfil your goals and requirements.

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Are you someone who is facing a number of hurdles while managing your own money? Well, this is when you need to give a thought about getting in touch with a reliable financial advisor in Billericay. Here is everything you need to know about a financial advisor, what they do, and how they may work wonders for you in the best way possible.

Who is a financial advisor?

In addition to this, they make sure that the plan makes you save your money, invest in the right manner, and lessen the debt.

According to the professionals, a financial advisor in Billericay is an expert who is known to offer assistance or in some situations proper management for your finances. In addition to this, there are times when these professionals can also act or be a digital investment management service provider known as a robo advisor. Have you been searching for a financial advisor? Take into consideration all these factors and then make the next move.

What do financial advisors do?

These professionals are people who offer financial services. These services differ from the type of advisor you get in touch with. However, in most of the cases, a financial advisor will take a look at your present financial situation and your expenses, debts, and assets are no exception. After they take into consideration all the mentioned points, they will find areas that need improvement.

Secondly, a financial advisor will always make sure that your future financial requirements are met. In order to do so, they will make sure that a plan is prepared. They will then put this plan into action and ensure you have sufficient funds in your bank account. This money can be used whenever needed.

The Final Words

These are some of the factors you need to know about a financial advisor. In order to know more about them, feel free to search the web. From their roles and responsibilities to the benefits one gets to enjoy, and much more, you will find everything here. Also, if you want to hire one, then make sure you do some research and then make the next move. Hiring a financial advisor is not a small task and it should not be taken for granted.

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