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Australian Capital Market - Case Study Example

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This paper "Australian Capital Market" focuses on the fact that Australia, as a country, has had a robust capital market and a vibrant stock exchange market over the past few decades. Some of the stocks that have featured prominently in the country’s stock market in the past…
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Download file to see previous pages This paper will discuss the Australian Capital Market and will also focus on the impact of the global financial crisis on the country.
The capital markets have been faced with challenges especially during this period of the global financial crisis. The global financial crisis has negatively affected the Australian capital markets and therefore there has been a pressing need for a serious counteraction to raise the country to its usual state according to RICS Research (2007). In the last three months, positive change has been recorded in Australia’s money market. More initial public offers by private companies have been noted and indications show that this trend will most likely continue. This has increased the sharemarket performance of the various industries. Indications show that banks are reluctant to provide financing in terms of debt financing.
Companies have adopted merger and acquisitions to survive through the recession like Tolhurst Noall which merged with Patersons securities (RICS Research, 2007). This has prevented them from dropping out of the industry. Companies are diverting attention to the e-commerce/digital media companies that are taking a significant market share from newspapers and magazines. The country has seen a lot of reluctance in debt financing since financial institutions have preferred to fund businesses through equity as opposed to debt. Companies that seek to increase their capital, one viable option has always been to give up a generous portion of their shareholdings.
While IPOs were a common way of cashing out investments in the last couple of years, this is no longer the case as many investors have not been able to venture into new businesses due to restrictions on IPO’s according to ResearchWhitePaper (2010). The country has however continued to enjoy a lot in terms of issues. In 2007 for example, Ivanhoe Australia acquired about 12% shares in Exco to become the major shareholder in the company. ...Download file to see next pagesRead More
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