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Westfield and QR mask a poor year

THE number of businesses listing on the Australian sharemarket nearly doubled in the past financial year, with the resources sector leading the charge.

THE number of businesses listing on the Australian sharemarket nearly doubled in the past financial year, with the resources sector leading the charge.

But the floats of the rail operator QR National and Westfield Trust eclipsed funds raised by other businesses, disguising an otherwise weak initial public offering (IPO) market.

A Deloitte Corporate Finance survey revealed the value of funds raised in IPOs jumped to $7.6 billion in the year ending June 30, from $4 billion the year before.

QR National and Westfield Trust generated $4.05 billion and $2.01 billion respectively.

The Deloitte corporate finance partner Steve Woosnam said the listing of QR National had raised hopes for the IPO market. However, the market failed overall to meet expectations.

"The equity market simply couldn't match the valuation expectations of vendors or those achieved through private sales," he said.

A total of 123 businesses were floated on the sharemarket, compared with 63 last year and down from 221 in 2007.

Western Australia accounted for 63 IPOs, NSW 26, and Victoria 13. The resources sector produced 95 floats, almost 80 per cent for the year.

Fortis Mining, which listed at 20? a share in December, was the best performing company. It raised $3.5 million to fund gold and base metals exploration in Western Australia. Its shares then gained 575 per cent after acquiring potash interests in Kazakhstan.

The Platypus Asset Management portfolio manager Prasad Patkar said investors were willing to take risks on resources stocks but other sectors remained weak.

"Commodity prices are the only source of optimism," he said.

Mr Patkar said "macro uncertainties" including European debt problems and a struggling US economy had dampened investor enthusiasm.

"I don't think the market's all that strong ... there were a lot of floats which have struggled to come on."


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