Ready for takeoff:
Australian ECM Review 2024

2024 in review

IPO activity in 2024 continued to be very low, affected by persistent elevated interest rates, high inflation, geopolitical events and ongoing economic uncertainty, as well as simply downbeat market sentiment, without the change of mindset that a series of successful IPOs would have provided. The downturn in IPOs has now persisted for three years in a row, with the total number of IPOs remaining below long-term averages at 26 for the year.

Outlook for 2025

These trends are anticipated to continue as IPOs prepare for take-off in 2025. While the market has not yet bounced back to its peak in 2021, with interest rates stabilising, together with a stronger second half of listings in 2024, there is a level of optimism as we head into 2025. Tempering this confidence somewhat is the heightened geopolitical instability and global tensions including following the US election and the potential for a global trade war. Click here. for further details of the 2025 outlook.

IPOs 1

There will continue to be an industry focus on the state of the IPO market as an outsized indicator of the health of the Australian capital markets. While we would like to see the IPO market build on the momentum from last year, we note that another appropriate indicator of the health of capital markets is the capital raising activity in the secondary markets, which, as we have noted in ‘2024: Secondary raisings by the numbers’, reflects positively on the market with growth in 2024 as relative to 2023.

IPOs 2

With the world adjusting to a new US President and a Commonwealth Government election in the first half of the year, we again expect that the primary IPO window will be September to early December 2025. Overall, we consider that this being the most popular timing for IPOs is a structural reality of the Australian market. If Australian inflation and interest rates ease as currently expected, we expect that the start of the September IPO window would be a good time to launch an IPO to ‘beat the rush’. We are optimistic that the large IPOs which were successfully undertaken last year will embolden others to bring their company to market in 2025.

Sectors

We expect the sectors which will show strength in 2025, both for secondary raises and IPOs, to be materials (given the nature of the ASX) but with a focus on those which support the energy transition, energy stocks and healthcare/pharmaceuticals, given some of the broader themes that are playing out across the Australian economy. That said, strong companies in other sectors who have a good ‘equity story’ as they conduct their raise should find strong support from Australian investors.

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