31 January 2024

Maximising access to the capital markets


VICTORIA GEDDES, Investor Relations


It is hard to find consensus on to what extent the Australian capital markets will be open for IPOs and secondary raisings in 2024. There does, however, seem to be a view that there are likely to be positive factors that will help to mitigate the uncertainty that stymied access to capital in 2023. In view of this, there are several Investor Relations activities that can be undertaken now to ensure companies are well positioned for any improvement in market activity.

Interest rates to stabilise

The rapid rate tightening cycle by the Reserve Bank Australia, which saw 13 rate hikes from May 2022 to November 2023, is expected to conclude in the first half of the year, followed by an expectation of easing monetary policy in the latter part of 2024. This is supported by the shift in monetary policy by the US Federal Reserve in December when Chairman Jerome Powell stated that rate increases “were not the base case anymore”.

Amongst Australia’s big four banks the Commonwealth Bank of Australia and Westpac are forecasting a first interest rate cut in September 2024, while ANZ is predicting it will be in November 2024 and NAB thinks it will not be until December 2024. Stability around Australian monetary policy is seen as a positive, as is the effect of the recent rate rises in helping to control inflationary pressures within the Australian economy.

Stability and certainty

While there remain significant geopolitical tensions across the globe, a potential benefit from some stability returning to the outlook for Australian interest rates and inflation, is that it provides a degree of certainty for Australian business. This helps drive confidence to invest in capital projects, which in turn may increase demand for access to capital.

Greater certainty around interest rates and borrowing costs can also give the market more confidence to support companies’ investment plans. Higher rates mean access to money is not as easy as it was during the extremely low rate, post GFC environment or the Government bailout days of COVID, so investors are more discerning. When money isn’t cheap investors are more likely to assess investment opportunities based on a company’s fundamentals and investment thesis rather than a sector thematic.

Tools in the IRO’s kit bag

In this context, companies that need to access capital need to be sure they are effectively communicating their investment case to shareholders and potential investors. An effective Investor Relations team has many levers they can pull to help optimise a company’s access to capital, be that via IPO, Placements, Rights Issues or Share Purchase Plans. These include:

  1. clear and accessible communication of a company’s strategy, and how the funds raised will support the execution of that strategy, is fundamental
  2. if there is sufficient lead time, a perception audit may identify gaps in the market’s understanding of the investment opportunity which can then be addressed as part of the communication strategy
  3. clarity of the messaging can be enhanced with professionally designed, supporting materials, be that physical documents or online collateral
  4. connecting directly with retail shareholders through a targeted engagement plan to ensure that they are aware of the raising, understand how to participate and can raise any issues/ask questions that will help support their decision
  5. targeting new investors is integral to any IR programme so using this activity to build a database of potential shareholders facilitates the process of raising capital and results in a register that is supportive of the company’s growth strategy over time.

Bespoke campaigns for capital raising

FIRST Advisers has been supporting companies with their capital raising campaigns for over fifteen years. Our approach has always been to design a campaign that fits each company’s specific objectives rather than apply a standard template of services. This is because we offer the full range of IR services in-house, so we are agnostic as to which ones will deliver the best outcome for the client. We have IR advisers with lengthy careers in investor relations as well as deep experience working in financial markets; an in-house design and creative team to ensure the messaging is effectively communicated; an in-house call center to run effective proxy solicitation campaigns that ensure as many shareholders as possible are aware of and can participate in a capital raise; and our market leading registry analytics team, which delivers beneficial ownership analysis for companies ranging from small-cap to Top 100 companies, is skilled at global and local investor targeting.

FIRST Advisers has the expertise, experience, and the tools to design and execute the right campaign in support of any capital raising so get in touch if you would like to know more.


 

28 April 2022

The IPO market, so far in 2022


ROWAN CLARKE, Investor Relations The IPO market in Australia was buoyant from late 2020 through 2021, following a period of subdued activity through 2019 and the first six months of Covid. This blog looks at how the IPO market is backing up in 2022 following a performance that broke all records in 2021. Despite initial […]

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30 November 2021

FIRST Edition in 2021


GILES RAFFERTY, Corporate Communication and Media Adviser. 2021 is drawing to a close with a sense of COVID-19 déjà vu. In late 2020 a new COVID variant, labelled Delta, was first identified in India. The Delta variant is characterised by mutations to the ‘spike protein’ which make it highly transmissible. The Delta variant is thought […]

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30 June 2021

The IPO Market in 2021


ROWAN CLARKE, Investor Relations The IPO market in 2020 sprang into life in October, having retreated into hibernation with the advent of COVID. The rush to list turned into a stampede as the year drew to a close with December registering a record listing in one month of 29 companies. This included large and high […]

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31 January 2021

The IPO Market in 2020 – the Final Scorecard


VICTORIA GEDDES, Founding Director In September 2020 the door to the IPO market flew open and dozens of companies poured through in a rush to list before the Christmas/New Year shut down. Memories were still fresh from late 2019 when a promising IPO market was stopped dead in tracks in October as several high profile […]

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28 September 2020

The IPO window is wide open, but for how long?


VICTORIA GEDDES, Executive Director. The IPO window has unexpectedly opened after more than 18 months of subdued activity. Given the slowdown since February due to COVID-19 and the level of uncertainty surrounding the outlook for economic growth, no-one was banking on a quick return in 2020 to the levels of activity that the market had enjoyed […]

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28 September 2020

TOP TEN TIPS FOR IPO COMPANIES


VICTORIA GEDDES, Executive Director. As the market braces for an avalanche of IPOs to hit the market in the December quarter, it is time to review our playbook for IPO investor relations, to highlight just what it takes to maximise the chances of a successful life after listing. Here are our top 10 Investor Relations tips […]

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16 December 2016

TOP TEN TIPS TO BE IPO READY


VICTORIA GEDDES, ECECUTIVE DIRECTOR The various high profile successes and failures of new listings since the IPO window re-opened in mid 2013 is salutary reminder that there is no such thing as a safe bet when it comes to investing in the equity market. As we look ahead to 2017, there is already a crowded […]

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2 November 2016

ASX Updates Admission Requirements for Listed Entities


Following an extensive consultation period, which began on 12 May 2016 with the release of the consultation paper ‘Updating ASX’s Admission Requirements for Listed Entities’ which set out a number of proposed changes to the ASX listing admission requirements, the final ASX admission requirements were released today. The key listings admission rule changes are: For […]

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5 October 2016

ASIC takes a close look at social media use in capital raisings


BEN REBBECK, EXECUTIVE DIRECTOR Oct 5, 2016 On 19 September 2016, ASIC reported on its review of the marketing of initial public offerings to retail investors. The notable feature of this review is that ASIC is now taking a close look at the marketing capital raisings via social media and other platforms, in addition to […]

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1 June 2016

ASX to lift the hurdles for listing


Ben Rebbeck, Executive Director The ASX has recently launched a consultation process ahead of proposed changes to the requirements for companies to list on the ASX market.  If implemented, the changes will raise the financial and shareholder spread hurdles for all companies seeking to list, whether by IPO or ‘back-door’ listing. According to the ASX, […]

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