By David Rogers
QR National Ltd. was up 2.4% at 2.61 Australian dollars (US$2.59) from the A$2.55 initial public offering price, in a closely watched debut for Australia’s largest IPO in more than a decade.
Nearly 10% of shares on issue, or 220 million, changed hands in the first 15 minutes of trading.
Macquarie Private Wealth Division Director Martin Lakos says his firm values QR at about A$2.75 a share but has a preference for Asciano from a valuation perspective.
“This is day one of the IPO, so I wouldn’t be judging it at this stage,” he says. “At A$2.62, it still doesn’t look too expensive.”
He expects institutional interest to pick up next year with index and long-only funds likely to seek some exposure when the stock enters S&P/ASX 200 next March.
The Queensland government sold a 60% stake in the railroad as part of a larger asset sale program to raise money and improve the state’s credit rating. The government was hoping to sell as much as 75% of the railroad on the public market but it didn’t find sufficient demand for that large of a placement.
International investors took up a large part of the QR National IPO. Nearly two-thirds of the total share sale went to institutions, with domestic institutions representing just about half of the institutional register.
QR National is a major test for the Australian IPO market. It is the first multi-billion dollar IPO to come to the domestic market since Myer Holdings Ltd. late last year. Myer’s disappointing performance post-IPO, followed by a handful of other IPOs that didn’t trade well after listing, left the market for new floats essentially shut for much of this year.
A strong debut for QR could help reignite the market for public offerings here.
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