Thomson Financial Pty Ltd Level 7, 34 Hunter St Sydney, NSW 2000, Australia Phone (61-2) 9225 3100 Fax (61-2) 9232 6821 www.thomsonfinancial.com News Release *FINAL* Contact : Jose Neville Phone : (612) 9225 3100 www.thomsonfinancial.com. Thomson Financial IBCM Equity League Tables Year Ending Dec 2000 Barnstorming Second Half by Winner What an eventful start and end to the year 2000. The seeing in of the year 2000 passed off without incident for financial markets after earlier worries about the Y2K problem and it s impact on the world economy. For the first 4 months of the year all worries were forgotten as investors rushed into technology stocks and valuation principles were pushed aside. Technology stocks could do no wrong as investors sought to replicate the tremendous returns of the prior few years. Analogies were drawn to the bubbles of Tulip Mania and Poseidon but the ranks of the doomsayers were slowly being whittled down. Finally the bubble was pricked in mid April with the fall of the NASDAQ market that reverberated throughout the world. Nonetheless markets eventually did settle down as investors switched focus to old economy stocks and biotechs. In the aftermath of the correction, new issuance volume levels plunged approximately 50% to $460million in the month of May after averaging about $1 billion per month since April 1999. Within a month however new issuance activity was back to pre crash levels with volume recovering to average about $1.5 billion per month until September, with investors keeping a close eye on the smoldering Pg 1
technology sector. Which came back to haunt markets at the end of December just when technology bulls were expecting a Santa Claus rally. Attention has now focused onto the year 2001, with many expecting a much tougher year given volatility in the US markets and continued weakness in the Japanese economy. Though the surprise 50bp FED rate cut on Jan 3 has improved sentiment somewhat with further expectations of another 25-50bp cut at the FOMC meeting at the end of January. And the RBA also expected to follow suit at it s next meeting. The Australian market was also characterised by the continued inroads made into traditional broking by online discount brokers and some consolidation among traditional brokers with the acquisition of stakes in Johnson Taylor and Morgan Stockbroking by UBS Warburg and ABN Amro respectively. The year also saw the first equity raising sole led by an online broker. This was the IPO of Pan Pharmaceuticals, which listed on the 23 rd of August after raising $55million and was fully underwritten by Commonwealth Securities. Overall, the market has been a relatively strong one with activity for the year running at 1019 issues. Which has been the highest period on record since TFSD began collecting Australian data in 1994. This figure was up 9.2% on the 1999 record year, which itself was up 64% on the previous year. In terms of value, the year has also been a relatively good one with total issues valued at $12.95billion, though unable to match previous highs due to the lack of a Telstra sized issue in 2000. Excluding Telstra, the year would have been the second highest on record, falling short of the $13.3billion set in 1998. Australian Equity Raisings Excl Telstra 14000 1100 13000 1000 12000 900 11000 800 $million 10000 700 9000 600 8000 500 7000 400 6000 1994 1995 1996 1997 1998 1999 2000 300 Value $mil Number Pg 2
League Table Rankings Australian Domestic Bookrunner Table First place overall went to UBS Warburg with total equity raisings worth $2.835billion. Warburg had a strong second half result, accounting for 30.9% of equity raisings in the period compared to 9.6% in the first half of the year. Notable deals for them included a $300mil placement for Westfield Trust in June, the NRMA demutualisation in August and a $700mil placement for Fosters Brewing Group in September, as part of Fosters equity financing of it s Berringer acquisition. Equity raisings for the property trust sector was another highlight of Warburg s year with issues amounting to $1.12billion or 39.6% of their total. This value also represented approximately 63% of the total amount raised for the property trust sector. Second place was closely contested between Macquarie Bank and ABN Amro Rothschild, with Macquarie prevailing with issues worth $1.19billion against $1.14billion for ABN. Notable issues for Macquarie included a placement for QBE Insurance ($161mil), the NRMA demutualisation ($1.06billion) and the privatisation of Alinta Gas ($202mil). For ABN Amro it was another strong year, building on from their performance in 1999. Deals of note included an IPO for Australian Pipeline Trust ($488mil), the Hutchison Telecommunications rights issue ($750mil) and a placement for General Property Trust ($200mil). Other participants making up the top ten list in order of ranking included JP Morgan, Merrill Lynch, Deutsche Bank, JB Were, CS First Boston, Salomon Smith Barney and Southern Cross Equities. Of note were the several close contests among the investment houses for placings within the top 20. In the ranking for the most number of deals, the table was led by JP Morgan with 34 deals, followed by Macquarie Bank in second place with 26 deals and Wilson HTM in third place with 22 deals. JP Morgan s 34 deals comprised of 14 IPOs, 4 rights issues and 16 private placements. Their largest issue was that of the IPO for Billabong International which raised about $295million. An industry breakdown of the market broadly sees the telecommunications and hitech sector accounting for a substantial part of the market (approximately 35%) followed by finance/insurance, property, manufacturing, natural resources and healthcare/pharmaceuticals. With natural resources still dominating the market in terms of number of issues (approximately 45%) Please turn to pages 6 and 7 for the top 20 list of managers ranked by value and top 10 list of managers ranked by number of issues. Pg 3
Initial Public Offerings. The year had seen one of the best starts for IPOs in recent times, however although numbers were substantially up on previous years, issue size was down. In total there were 158 IPOs, raising $4.78billion for the year. The top managers in this category were Macquarie Bank, UBS Warburg and ABN Amro Rothschild. With IPOs worth $673million, $609million and $583million respectively. The largest IPOs being NRMA Insurance Ltd ($1.066billion led by UBS Warburg, Macquarie Bank and CS First Boston) followed by Australian Pipeline Trust ($488mil led by ABN Amro Rothschild) and Uecomm Ltd ($384mil led by Deutsche Bank and Salomon Smith Barney). Initial Public Offerings Excl Telstra 6500 180 6000 160 5500 140 5000 120 $mil 4500 4000 100 80 3500 60 3000 40 2500 20 2000 1994 1995 1996 1997 1998 1999 2000 0 Value $mil Number Rights Issues Equity raisings via rights issues had another lackluster year with 116 issues raising $1.6billion. The leading managers were ABN Amro ($372mil), UBS Warburg ($351mil) and Macquarie Bank ($213mil). And the largest issues were Hutchison Telecommunications ($702mil ABN Amro & UBS Warburg), Australand Holdings ($255mil Deutsche Bank & Macquarie) and Pacific Hydro ($56mil JB Were & JP Morgan). Private Placements The year saw a very strong market for private placements, with the total amount raised equaling $6.5billion from 745 issues, both of which were new records surpassing the previous record set in 1999. This though was not surprising especially during times of strong stock market performance. The top firms Pg 4
for placements were UBS Warburg ($1.87billion), Merrill Lynch ($663mil) and Southern Cross Equities ($347mil). The 3 largest placements were Fosters Brewing ($700mil UBSW), CSL Ltd ($363mil Merrill Lynch) and Westfield Trust ($300mil UBSW). Southern Cross Equities was a relative newcomer to the league tables and is the former PG Intercapital. Their largest issue was a placement for One.Tel Ltd raising $280million. Private Placements 7000 800 6000 750 700 5000 650 4000 600 $mil 550 3000 500 2000 450 400 1000 350 0 1994 1995 1996 1997 1998 1999 2000 300 Value $mil Number Fees & Premiums The average underwriting fee was 3.83%, which was marginally higher than the average for the previous 5 years of 3.22%. And the highest underwriting fee was 6.96%, incurred by Arcadia Minerals NL for a rights issue they had earlier in the year. On the other hand management fees received by brokers were relatively stable at 0.98% for the year and 0.91% for the prior 5 year average. Year 2000 was also a very good year for stag premiums on IPOs with the year s average being 33.4% compared to the prior 5 year average of 24%. The best performing IPO from a stag return perspective has been that of Axon Instruments which had a first day return of 730% and was underwritten by D&D Tolhurst and Saw James Capel. Top 5 Best & Worst IPO Stag Premiums of 2000 Company % Gain Company % Loss Axon Instruments 730.0 Worldschool Ltd -71.0 Emitch Ltd 504.0 GoConnect Ltd -57.1 KAZ Computer Services 301.0 GOCORP Ltd -56.0 Clarity International 288.0 Minotaur Resources -55.0 Norgard Clohessy Equity 245.0 Terraplanet.com -46.0 Pg 5
THOMSON FINANCIAL BOOKMANAGER LEAGUE TABLE CRITERIA Issues of securities (excluding debt, convertibles, preference shares and hybrid issues) for cash consideration by Australian companies (1) Initial Public Offerings (2) Primary placements (3) Secondary placements / block trades with documentation attached (prospectus or information memorandum) (4) Rights Issues (5) Secondary public offerings and the like which are issued with a prospectus The fully paid amount is attributed to partly paid shares. Credit is given to Bookmanagers only. Credit is given on a proportional basis. Where there are joint bookmanagers, the amount raised will be divided equally. Domicile of companies will be based on their corporate headquarters. Pg 6