Ownership Matters compiled and analysed capital raising data for every company in the S&P/ASX 300 in the post-GFC period (2010 to 2012) and reported the following:
- Equity capital raisings by the S&P/ASX 300 totaled $33 billion in 2010-2012, down from the 2008-2009 period when $100 billion was raised in the S&P/ASX 200.
- Raisings became fairer during this time with proportionally more funds raised through renounceable entitlement offers.
- Despite lower volume in the post-GFC period, capital raising fees rose substantially with S&P/ASX 200 fees increasing by 27.6 percent, to 2.45 percent of each dollar raised. ASX 300 fees in aggregate were 2.71 percent.
- It is too early to observe whether structural reforms to the capital raising process in Australia will reduce the rising costs (in dilution and fees) observed in the 2010-2012 period.
- Further reforms such as abandoning prospectuses, improving fee disclosure, director accountability and the transparency associated with selective capital raisings would enhance market confidence in Australian capital raising practices.
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