Investment banks feast on block trades as IPOs remain in limbo

afr.com:

Investment banks’ equities teams enjoyed a bumper October after more than $1 billion in block trades crossed traders’ desks last month.

Whitehaven Coal’s $400 million-plus across two trades, and an approximate $157 million effort from Origin Energy stood out, as equities teams moved shares off the back of mergers and acquisitions activity. The trades are a welcome injection of activity for local equities teams hamstrung by a slump in headline-grabbing initial public offerings.

Simone Haslinger and Jonas Troeber, JPMorgan’s co-heads of equity capital markets, saw their team do blocks for Ingenia and Ventia. 

Some of the busiest desks were at Citi, JPMorgan, UBS, Jefferies, Macquarie, Barrenjoey and Morgan Stanley. Liontown Resources, Ingenia Communities Group, Star Entertainment and Wildcat Resources accounted for more than $400 million in blocks, data from Bloomberg showed.

Block trades can hinge off broader equity market volatility, but last month’s flurry of activity coincided with unique circumstances at a number of ASX-listed companies. Whitehaven, Origin and Liontown have all been subject to potential acquisition activity, Wildcat was exposed to a raid on its shares, and Star Entertainment tapped equity markets for emergency capital needs.

“We’ve seen a meaningful level of activity in relation to complex M&A transactions as investors started building stakes pre- or post-announcement,” said Jonas Troeber, JPMorgan’s co-head of equity capital markets for Australia and New Zealand.

While deals were hinged to events like Gina Rinehart’s raid on Liontown or Mineral Resources’ efforts for Wildcat shares, bankers went into October confident equity markets would stabilise.

Mr Troeber said there was a view interest rates