Research to avoid disappointing floats

A recent survey by KPMG shows that the share prices of 57 per cent of the 161 floats in the 1999-2000 financial year were less than their issue price. The study suggests that a particularly buoyant market enabled the listing of companies that otherwise would not have made it. To avoid losses, investors are advised to research the calibre of the company’s board, senior management, balance sheet, and to consider the type of industry it is in, as well as its potential for growth.

‘Navigating treacherous sea of dud floats’, The Australian Financial Review Weekend, 16-17/09/00, p 34.