Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Saturday, 25 April 2015

Capital raisings

Market statistics

Let's take a superficial sideways glance at a few securities exchange market statistics, with some $4.8 billion of secondary capital raised on the ASX in March 2015.

This is the largest volume of secondary capital raised in the month of March since the glut of 2009 as a rush of listed companies hurriedly refinanced and recapitalised.

The rolling annual level of initial capital raised has been tracking at its highest level in well over a decade.

The volume of initial capital raised has been kicked ahead by the $6 billion Medibank float which became evident in the November figures, the largest privatisation since Telstra. 

In total $8.2 billion of initial capital was raised in the month of November 2014 alone.

Over the year to March 2015 $68.9 billion of capital raisings been recorded in the ASX market stats.


Context

Such data is interesting but does need to be understood in the context of what is happening in the market.

Transactional activity in aggregate has picked up since a lull through 2012, and this tends to be a positive sign where businesses are raising capital for the purposes of investment or growth.

However, high levels of secondary raisings can also be an indication of refinancing under duress, as the huge swell of capital raised through 2008 and 2009 showed.

Between December 2008 and December 2009 more than $111 billion of secondary capital was raised as balance sheets were shored up.

If commodity prices remain under pressure then it is possible that we'll see further secondary capital raisings for capital restructuring or refinancing purposes, which is clearly a less positive signal.