Speaking at the exchange’s annual general meeting on Monday, Lofthouse said that while global IPO activity remains subdued, “green shoots” are emerging, with 15 new listings recorded in the first quarter of the year. fiscal year 2024-2025.
Major entrants this year include post-split Webjet Group, Bhagwan Marine and a dual listing of Alcoa.
Lofthouse added that several other companies have also hinted at possible listings on the ASX in the near future, signaling growing confidence in market conditions.
The ASX’s contraction has been noted for months, with recent data highlighting a dramatic shift in Australia’s investment landscape, with public listings falling from 2,219 to just 2,124, reflecting a global trend where the attractiveness of public markets is rapidly declining.
According to the ASX Group’s latest activity report, the market operator recorded just 15 new listings in the 12 months to September 30, while 46 entities were delisted from the exchange.
But while analysts see it as a sign of a larger shift in how companies choose to grow and access capital, Lofthouse believes an uptick is due to better macroeconomic conditions.
“Many of the trends we saw at the end of FY24 continued into the first quarter of FY25,” she said.
“More normalized macroeconomic conditions appear to support increased listing activity, although current geopolitical instability could further impact confidence. It is important to note that there is a lag between these more favorable conditions and the completion of IPOs, while issuers go through the process to fulfill their listing obligations.
More broadly, the CEO said the ASX had seen $411 billion of net new capital listed on the ASX in the seven years to September 2024, which she said demonstrated the long-term attractiveness of our market.
Reflecting on the first quarter of FY24-25, she added, “The total value of transactions in the spot market increased by 11% in the first quarter of FY25 due to offshore macroeconomic events, including Central bank rate cuts and speculation around new economic stimulus measures in China have led to increased volatility.
The ASX’s financial statements for FY23 and FY24, released earlier this year, revealed that cyclically, declining capital markets activity has impacted its listing activities, the The division’s total revenue decreased 4.8 percent to $208.2 million.
Initial public listings (IPOs) also weakened from 57 recorded in FY22-23 to 56 in FY23-24, coupled with a high number of delistings from 119 to 156.
Despite the data, the ASX’s head of listings assured earlier this year that after a calmer period, optimism is returning as the cyclical nature of IPO activity prepares for a resurgence in the second half of this year, with momentum continuing through 2025.
In an article published on the ASX in July, Kate Galpin said: “After an extremely busy 2021, it has been relatively quiet over the past two years, similar to 2011-2012, but the IPO market is cyclical and activity will return. .
“Headwinds caused by uncertainty around inflation and rising interest rates played a role in reducing the number of new listings globally last year, and the ASX did not no exception with the postponement of some highly anticipated IPOs.”
Others, however, believe that the reduced size of public markets is a sign of greater updating of private markets.
Martin Donnelly, managing director of client relations at EQT Capital Raising, recently explained that rising costs and the complexity of going public are some of the key considerations, pushing companies to opt for the private capital route, coupled with stricter regulations, increased compliance requirements and increased stakeholder oversight makes the public market less attractive.
“Private markets have become an essential part of modern investment strategies, not only for portfolio diversification, but also as an engine for long-term sustainable wealth creation,” Donnelly said.
“With fewer public company choices, investors can no longer rely solely on the public markets for growth. By tapping private capital, they can access innovative sectors and high growth opportunities that offer more resilience and less exposure to market volatility.
According to the ASX, total new capital listed in September was $6 billion, compared to $7.3 billion in the previous corresponding period.
Across the Atlantic, the number of companies listed on the US stock exchange has fallen by almost 50 per cent over the past 25 years, underscoring that the ASX-specific contraction is not not a single trend.
Similarly, the London Stock Exchange has seen a reduction of more than 15 percent in its listings over the past decade, according to EQT.
