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Wisetech Global debut augurs well for Aussie tech firms
[SYDNEY] Shares of Australian freight software company Wisetech Global Ltd soared above their issue price on debut on Monday, a sign of growing confidence in the tech sector as investors seek relief from the global commodities slump.
The stock traded up to 13 per cent above its issue price in a flat overall market, suggesting a shift of sentiment in favour of a sector that has for years lived in the shadow of Australia's heavyweight industries of mining and finance.
Seven of Australia's 10-largest tech listings have been in the past two years, according to Thomson Reuters data, and the sector looks set for more support in future with Prime Minister Malcolm Turnbull pushing to refashion the economy as a technology hub following the end of a mining investment boom. "There's more acceptance of the business and what it can offer and how fast it can grow," Burrell Stockbroking director of trading Richard Herring said.
"It still needs to be a good business."
The solid performance for Sydney-based Wisetech comes less than a year after Australia's Atlassian Corp Plc shunned its home market and picked the US Nasdaq for a listing, a move seen by some as a major blow to the domestic technology industry.
One of Australia's biggest software companies, Atlassian cited a lack of support and understanding from Australian investors and politicians as a reason for heading offshore, reflecting long-standing concerns that promising Australian tech talent could not achieve lift-off in the relatively small local market.
Wisetech's debut points to a pickup in overall IPO activity in Australia, which fell by two thirds in 2015 and had its smallest March quarter, by total capital raised, since 2008, according to Thomson Reuters data.
As Wisetech was listing, electronics and homewares retailer The Good Guys Discount Warehouses (Australia) Pty Ltd said it had hired a consultant to decide on a possible listing.
A source familiar with the situation told Reuters the company would have an enterprise value about A$1 billion (S$1.02 billion).
Wisetech raised A$170 million, Australia's fifth-biggest pure-play technology IPO, and has a market capitalisation of just over A$1 billion.
In its prospectus, company founder Richard White said the purpose of listing was to pay down debt and fund growth. Mr White kept about half the company's shares.
Wisetech says it has built up 6,000 customers in 115 countries since being founded in 1994. Its main software offering, CargoWise One, lets freight and logistics companies keep track of goods.