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Screenshot of a breaking news alert e-mail from Q2 2017
In recognition of the increasing investor demand for access to Initial Public Offerings (IPOs), CMC Markets Plc (LON: CMCX) and OnMarkets BookBuilds (OMB) have entered into a deal which allows CMC Markets’ clients to bid for IPOs through their broking account using OnMarket’s platform.
IPOs are delivering stellar returns to investors, with the average gain on the 21 companies that listed on the Australian Securities Exchange (ASX) in the second quarter sitting at 33.5%. OnMarket is the world’s first direct access portal and app for IPOs and equity placements. Investors can sign up, bid and invest in companies without paying any commissions or brokerage.
OnMarket’s recently released Second Quarter IPO Report reveals how lucrative ASX IPO investments have been in recent times. That report showed that the average return from the 34 companies which had listed on the ASX over the year to June 30, 2016, was 23.3%, compared to a 1.2% fall for the S&P/ASX 200. Those returns follow a strong IPO market in 2015 when the average return on the 93 companies that listed on the ASX was 23%. That compares well with the S&P/ASX 200, which lost 3% over the same period.
The deal is the first of its kind that OnMarket has signed with a stockbroker as fintech expands its footprint in the investment community. Investors can seamlessly link to the OnMarket web portal through the CMC Markets’ online trading platform, using an application programming interface (API) providing access to the OnMarket platform. CMC Markets clients can then visit the IPO Centre and bid on IPOs by simply providing their CHESS Holder Identification Number (HIN) to have their securities appear within their broking account once the IPO has closed.
UK based CMC Markets went public earlier this year in its own IPO and at today’s share prices of £2.75 is currently valued at 791.76M.
Ben Bucknell, Chief Executive Officer of OnMarket BookBuilds, said the partnership with CMC Markets would help to engender greater investor interest in IPOs.
“We welcome CMC Markets confidence in our technology, which will enable its clients to more easily bid on IPOs and research each deal thoroughly using the OnMarket tool. OnMarket’s best-in-breed ‘More Info’ panel includes video interviews with management, company releases, third party research and relevant press articles. The platform was designed in response to survey data that shows investors need seven sources of information before making an investment decision. This tool allows users to be truly self-directed.”
“Straight through processing ensures direct matching of payments with bids and investors’ final allocations are automatically uploaded to their CMC Markets online broking account,” Bucknell concluded.
Andrew Rogers, Head of CMC Markets Stockbroking, said the deal would expand investment opportunities for its clients.
“In response to investor demand, we have integrated the OnMarket platform into our offering and created a dedicated IPO Centre within our online trading platform so investors can view information on IPOs in an easily digestible format and bid into these capital raisings in a seamless fashion. Importantly, shares are then allocated to their CMC Markets broking account, making it a very straightforward process,” said Rogers.