Australian capital markets raise record amount

Australian capital markets raised a record A$60 billion ($74.4 billion) of new equity during the 2008/09 financial year, defying expectations of a funding squeeze, says business advisory firm KPMG.

KPMG said that despite turbulent trading conditions Australian capital markets managed to raise record levels of new equity.

"In one of the more turbulent trading periods of recent decades, Australian capital markets proved to be resilient," KPMG said. "Over A$60 billion was raised during 2008/09, the vast majority from rights issues and private placements."

KPMG national head of mergers and acquisitions Rob Bazzani said placements vastly outstripped initial public offerings as a source of equity raising in the financial year just ended.

KPMG research found that less then 30 IPOs occurred during 2008/09 with under A$300 million raised in total compared with billions in previous years, reflecting a more risk-averse investor market for new company raisings.

Bazzani said mergers and acquisition deals were predicted to rebound in 2009/10 as liquidity improved, risk and pricing became more balanced and attractive asset value was recognised.

- AAP