Record cash raisings to $90 billion: ASX

The amount raised is way in advance of net new lending to non financial corporations in the first 10 months f 2008, according to figures from APRA, the key regulator.

In its latest monthly activity report for June and the year to June (plus the June quarter) the ASX said the cash raisings were made up of:

Initial offerings of $1.9 billion, down 83% from the previous year, and secondary share sales of $88.1 billion, up 74%. These were the myriad raisings by companies large and small and not new listings.

The total beat the previous record of $77.9 billion raised in the year to June 30, 2007. Most of that was in IPOs.

The $90 billion is around $22.5 billion a quarter, or close to $1.8 billion a week, which, if you think about it, is quite a sum of money.

It dwarfs the growth in lending from banks. According to APRA figures banks lent an extra $20 billion a month to non-financial companies from July last year to April 2009, the latest figures.

New lending to financial intermediaries in the same time frame rose $2.6 billion. (This is separate to the debt raised off shore)

Much of the capital raisings on market have been driven by bank demand for companies to recapitalise as part of some sort of deal to get existing debt lines rolled over, even for a reduced amount.

BlueScope Steel was one of these, as was property groups Stockland, GPT, Mirvac and a host of other companies.

Since June 30 date Rio Tinto raised its $US15 billion in a rights issue. It was announced in June, but actually raised in late June and early July and completed last Friday.

The biggest non-refinancing was the $3 billion raised by Santos to help it fund its ambitious expansion plans in LNG in Queensland and in the huge Hides project in Papua New Guinea.

Macquarie Bank, the ANZ, CBA, National and Westpac all raised billions from investors large and small.

""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," the ASX told the ASX inn the statement .

Financial firms including Macquarie, property companies such as Mirvac, and raw-material producers including Alumina Ltd. were been among companies that replenished balance sheets with share sales. The offerings were snapped up by pension funds that found themselves short on equities after the market's slump.

According to the AMP investors were sitting on about $200 billion in cash at the end of May.

The ASX said that "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.

"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 2,198, 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.

"The All Ordinaries Index closed at 3,947.8, a rise of 3.5% over the course of the month. The index remains 26% below its level of a year ago but is up 26.9% from the low in early March 2009.

"Total cash market trades for June 2009 were 10.3 million, up 8% on the pcp. Total trades for FY09 were 106.7 million, up 17% on the pcp.

"Average daily trades for June 2009 of 490,048 were 3% higher than the pcp. Average daily trades for FY09 were 420,002, up 16% on the pcp.

"Total cash market traded value was $116.3 billion in June 2009, down 13% on the pcp, with a daily average value of $5.5 billion, down 17% on the pcp.

Total value traded for FY09 was $1.1 trillion corresponding to an average daily value of $4.4 billion, both down 30% on the pcp.

"In June 2009 the average value per trade was $11,303, down 20% on the pcp of $14,098, and the percentage of traded value crossed was 31% (29% pcp). The average value per trade for FY09 was $10,587, down 40% on pcp ($17,692).

On market surveillance, the ASX said "There were 18,986 alerts in the quarter. This represents a fall back to more normal levels and is well below the high numbers seen in the December quarter which was a period of extreme market volatility. (Source).

"As at the end of June 2009, Surveillance had 21 open enquiries - 14 matters related to insider trading, 5 to market manipulation, 1 to disorderly market and 1 to trade reporting."

The ASX said there was a total of 31 insider trading inquiries during the year and the number in the final quarter of this year of 12 was up on the 7 in the final quarter of 2008.

"There were 224 continuous disclosure queries and 243 price queries during the quarter.

"The results are in line with previous quarters' activities.

"During the quarter, 8 entities were suspended by ASXMS for breaching the Listing Rules compared to 32 entities suspended in Q3 FY09 for the same reason.

"The previous quarter's result included 23 entities automatically suspended for not lodging financial accounts by the due date."