The IPO interest in the ASX is coming back. This is great news indeed because otherwise 2009 has been a really bad year. There have just been 10 companies that have tried to raise capital from the market and the amounts raised were mostly low. Consider this with 2007 when as many as 242 companies tried to raise capital. Over the last few months small and medium sized companies have faced a difficult time when they had to raise capital from the stock market.

However things are looking up at the Australian Securities Exchange. The IPO’s have to depend a great deal on investor confidence, and this sure seems to be returning because the government’s economic stimulus packages are taking effect and this is making the investors return to the market. Analysts are now saying that the next 12 months would be much better for IPO’s when compared to what has happened so far this year. Carsales.com is going to be the biggest IPO in more than 2 years. According to some reports, Myer, the departmental store is also coming out with an IPO that will be worth more than $2 billion. Offers such as these will surely bring out the investors from their shell.

One Big IPO Can Change Everything

“One small step for man, one giant leap for mankind” is a historic quotation of Neil Armstrong when he landed on Moon. In the context of the stock market too, ‘one single good IPO can change everything’. At least back in 2003 this is what happened. The Promina float raised $1.9 billions from the market and this worked as a catalyst as other companies felt confident that they would be also able to raise the funds needed. Before the Promina float too, the market was going through a phase of low listings.

You Need To Be Careful Though

Yes there are surely going to many more IPO’s in the coming months, but this is no indicator of the fact that we are going to see a major bull rally soon. This is true in spite of the fact that since March 2009, the markets have improved quite a bit. Some analysts are even saying that the economic recovery will not after all take the ‘V’ shape, but it will be ‘W’. This of course means that there might be a slide soon before finally we see the recovery that will be sustainable for some time at least.

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