Published On: Thu, Oct 8th, 2009

ASX Group Monthly Activity Report June 2009

The All Ordinaries Index rose for the fourth consecutive month during June, to be 7.9% higher over the first half of 2009 but down a total of 26% over the full financial year. Returns in world equity markets over the past six months were varied, ranging from small declines in Europe and small increases in the US to large rebounds in Hong Kong and Singapore.

While the global economic outlook continued to weaken, the relatively strong performance of the Australian economy has provided a solid foundation to underpin capital market activity over recent months. Continued moderation in credit market conditions in Australia and abroad during June reflected rising confidence that the worst of the financial crisis may have passed, even if there is still considerable uncertainty about the growth path ahead.

Volatility in Australian equity markets (as measured by daily movements in the All Ordinaries Index) remained around levels experienced in the previous three months, with average daily movements of 1.2% during June. At the same time, US volatility has declined significantly, with daily movements in the S&P 500 Index averaging 0.9% during June (down from 2.4% in March). Expectations of future volatility (as measured by the (VIX) CBOE Volatility Index) have also continued to moderate, with the index falling to levels last experienced prior to the collapse of Lehman Brothers in September 2008.

Overall capital raising and secondary trading activity (equities and derivatives) were very strong in June. Primary capital raisings remained weak in June with only one new listing during the month. However, significant secondary capital raising activity continued to flow as companies took advantage of strong demand for stock and the underlying efficiency of the capital raising process in Australia. During June, there were several large individual capital raisings, including ANZ Bank ($2.5 billion), Santos Ltd ($1.2 billion) and Mirvac Group ($0.9 billion), and many smaller raisings.

Daily average cash equities trading volume in June was the strongest since September 2008. Increased primary issuance of fixed interest securities and a market reassessment of the future direction of interest rates helped underpin stronger trading activity in fixed income derivative products.

Listings and capital raisings
In June 2009 there was one new listing, compared to 14 in the previous corresponding period (pcp). In FY09, 45 new entities listed, compared to 236 in the previous year. Total listed entities at the end of June 2009 were 2,1981, down marginally on the 2,226 a year ago.

Total capital raised in June 2009 amounted to $10.2 billion, up 95% on the pcp. There was $77.3 million of new capital raised and $10.1 billion in secondary raisings. Capital raisings in FY09 comprised initial raisings of $1.9 billion, down 83% on FY08, and secondary raisings of $88.1 billion, up 74% on FY08. Total capital raised in FY09 was $90 billion, an all-time record, eclipsing the previous record of $77.9 billion raised in FY07.

Article Source: ASX website

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