Expert picks: Where will the IPOs come from in 2021?
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As 2020 winds up, Stockhead has reached out to its pool of contributing experts for their view on what they hope 2021 will bring. Today’s question is: Which sector is going to produce the most IPOs in 2021? And why?
1. Guy Le Page – RM Capital
Nickel, Copper explorers/developers. Strong rebound in Ni-Cu projected.
Uranium Explorers/Developers: Rebound in U as a clean energy source.
2. Niv Dagan – Peak Asset Management
2021 is all about the “green economy” as renewable energy will be a key theme. The road to “emission free” by 2050, will force global corporations, government enterprises and municipalities to change the way they do business. This fundamental “shift” will see a huge re-rate in hydrogen, which is expected to replace the majority of the world’s depleted petrol and diesel cars by 2030.
This is an ambitious goal, however, “green hydrogen” will be the number one play in 2021, followed by MedTech and healthcare.
3. Simon Popple – Brookville Capital
Mining – there will be a lot of appetite for the sector which could well entice mines in private hands to list.
4. Hedley Widdup – Lion Selection Group
The mining sector, specifically explorers for all nature of mineral commodities. The latter half of 2020 has seen a surge in explorers looking to list – and not just those that have been in preparation for the last few years, a number either listing or at an advanced stage of the listing pipeline have been hastily composed as the market threw open the funding window.
This is the stage of the mining boom where we have seen close to 200 new listings in previous cycles.
5. Dean Fergie – Cyan Investment Management
What sector is likely to require the most capital or enjoy the most investor interest? I think there’ll be a resurgence in leisure in 2021 so travel, entertainment, gambling and alcohol are likely to feature.
I’m also aware that there are a lot of ‘neo-banks’ lining up for capital that we may see on the boards next year. However the listed personal lenders that have been active this year will struggle in 2021 and government handouts cease so I expect there will be some emergency secondary raisings amongst that cohort.
6. Luke Winchester – Oracle Investment Management
Hard not to see it being resources. Most prices have risen strongly post-Covid and will benefit from a further cyclical recovery. Beyond that, it’s embedded in the ASX’s DNA, you quickly see the flood of new money into the sector whenever the cycle turns.
7. Heath Moss – HLM Investments
Commodities – in particular base metals (copper, nickel, zinc etc).
8. Donna Warner – Barclay Pearce
The rapid growth of the internet has sparked transformation in many industries. Packaged software is an area that has been riding the internet boom. In 2020 to date, there have been nine IPOs in this space accounting for 12.5% of all IPOs. These names are DOU, CBL, NXL, DUG, HPG, LBY, AIM, ZBT, and EMD.
Control Bionics (CBL) is the best performer of the group with ~225% growth since its listing earlier this month. We expect this trend in packaged software coming to public markets to continue in 2021.
9. Josh Gilbert – eToro
I think we will see a big push towards fintech IPOs, as well as IPOs from the esports and gaming sector. Fintech giants such as Jack Dorsey’s Square have performed exceptionally well this year, especially as the demand for eCommerce continues to soar.
With companies such as Sony Entertainment and Microsoft reeling after their recent console releases, its expected investors will be keeping a keen eye on other gaming leaders to IPO in the new year.
10. Tim Buckley – Institute for Energy Economics and Financial Analysis
As with renewable energy infrastructure, the amount of public and private capital flooding into the surging zero emissions industries of the future will only accelerate in 2021.
Beyond green hydrogen, zero emission technology innovations in batteries, solar, electric vehicles, soil/forestry/industrial carbon sequestration and associated commodities.
11. RaaS (Finola Burke, John Burgess, Melinda Moore, Andrew Williams)
We suspect we’ll see a continuation of IPOS across the sectors that have dominated in this current half year – tech, online shopping and health/biotech IPOs.
The bigger question will be how these stocks perform in 6-12 months’ time, particularly if they are cycling an unsustainable COVID boost and have been brought to the market on unsustainable valuation multiples.
We also expect to see more renewable energy opportunities brought to the market, particularly as funds move towards carbon-neutral portfolios.
12. Gavin Wendt – MineLife
I’m guessing at this one, but I reckon it will be the gold sector.
13. Ron Shamgar – TAMIM Asset Management
Second half of 2020 was very strong for IPOs with technology and ecommerce leading the charge. Assuming market conditions stay elevated we expect 2021 IPO pipeline to remain robust and we still believe the tech and e-commerce sectors will dominate upcoming listings.