What’s Ahead for Capital Raisings on the ASX in 2021?

After a record year of capital raising activity, what’s ahead in 2021? INN asked experts and analysts to share their thoughts.

Last year was undoubtedly challenging for companies in all sectors, with an increased number of ASX-listed companies racing for cash to survive global uncertainty.

The Australian government implemented unprecedented monetary and stimulus measures to battle the impact of COVID-19, ultimately making 2020 a historic year for capital raising on the ASX.

At over US$37 billion last year, equity capital market activity hit a record not seen since 2015.

Speaking with the Investing News Network (INN) about capital raising trends seen in Australia, Elaine Tan of Refinitiv said 2020 was a strong year for equity listings in the country across multiple sectors.

According to the firm’s data, the financials sector accounted for the majority of the equity capital raisings in Australia, capturing 20.4 percent of the market at US$7.6 billion, up 30.5 percent from a year ago.

Materials followed behind with a market share of 17.3 percent for a total of US$6.4 billion, an 87.8 percent increase from 2019 and the highest annual total since US$7.3 billion in 2011.

“The sector also saw the greatest number of equity capital market offerings as it reached the busiest-ever annual period in 2020, driven by activity from metals and mining (US$5.7 billion),” Tan said.

Given that 2020 was such an active year, Antony Rumboll of Baker Mckenzie expects 2021 to be a little more subdued, assuming conditions generally improve as the COVID-19 pandemic subsides.

“That said, there is always a level of demand for new capital raisings,” he told INN. “With increasing commodity prices, we believe resources will be well supported if they need to raise capital.”

In 2021, companies across the technology, healthcare, financials and resources industries will likely continue to benefit from investor demand.

Looking at what could happen this year, Timothy Toner, managing director and founder at Vesparum Capital, told INN that the current market environment is certainly conducive to capital raisings.

“We expect companies in the resources sector to try to leverage the positive market sentiment to fund future development and exploration activities, particularly given the recent commodities boom,” he said.

For Tan, senior analyst on Refinitiv’s deals intelligence team, 2021 will most likely focus on recovery.

“While uncertainties remain, the momentum in equity capital market activity seen in 2020 is expected to continue as the impact of stimulus on the equity markets continues to provide liquidity and the imminent rollout of vaccines supports a decent rebound in economic growth,” she said.

Moreover, equity capital market activity in these sectors is seeing upticks already at the start of this year.

Total equity capital market proceeds raised so far in 2021 for the financials sector are up 258.9 percent compared to the same period in 2020, while materials proceeds are up 90 percent and high-technology proceeds are up 216.3 percent. Healthcare has grown 37.5 percent by number of equity issues, but has declined in proceeds by 51.8 percent year-on-year.

What’s on the horizon for ASX IPOs?

In 2020, companies not only looked to secure cash to protect their balance sheets and improve liquidity — some also decided to make the jump and go public. Initial public offering (IPO) activity on the ASX last year was robust, with a total of 113 companies listed, up by 23 year-on-year.

According to Refinitiv data, IPO listings in Australia from the high-technology sector had a market share of 16.8 percent, raising US$610.9 million, an increase of 12.2 percent from 2019. That was the highest annual total since 2015, when proceeds reached US$948.4 million.

“Nuix’s (ASX:NXL) US$353.3 million IPO was the second largest IPO in Australia for 2020,” Tan explained to INN. “As technology continues to be a disruptive enablement of change, it will continue to be an enduring trend into 2021.”

Companies that kicked off their public listings last year have seen their share price increase significantly, both in the tech space and the resource sector.

“IPO activity was very strong in the back half of 2020, and there are a significant number of potential IPOs in the pipeline for 2021,” Toner said. “We are seeing a number of high-growth private tech companies accelerating their IPO plans as a result of strong performance during the COVID-19 period.”

This year, the ASX expects the three popular sectors of technology, healthcare and resources to focus strongly on IPOs, Rumboll explained.

“The ASX is also placing a focus on international diversification of the (exchange), seeking more international companies (especially those from the US) to choose ASX as their listing venue,” Rumboll said. “Assuming the current conditions continue, we expect 2021 to be another strong year for IPOs.”

Speaking about the challenges for companies seeking a public listing, Rumboll pointed to the sheer number of IPOs coming to market, as well as market fundamentals and sentiment.

“The Australian IPO market can close very quickly, and so one bad experience for investors can quickly close the market,” he said.

Toner also pointed to the high number of companies looking to debut on the exchange as a challenge.

“Interest from institutional investors is probably the key impediment given most funds we work with are inundated with pre-IPO and IPO opportunities and (are) growing increasingly nervous about valuations.”

But can retail investors benefit from the upcoming listings on the ASX?

“Generally, retail investors must receive an allocation from their brokers, and so investors should look to their brokers in order to benefit from IPOs,” Rumboll said. “As with all investments, investors need to consider the prospectus closely to consider each IPO on its merits and take professional advice.”

For Toner, the odds are stacked firmly in favour of institutional investors in terms of access to IPOs.

“However there are still some compelling IPO opportunities for retail investors,” Toner said. “Due diligence is critical given the significant variability in deal quality.”

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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