OzForex float proves Australian appetite for tech stocks

Published on the 15/10/2013 | Written by Newsdesk


ozforex tech stocks

This month’s successful listing of online foreign exchange company OzForex has demonstrated the local appetite for technology stocks and bodes well for other planned IPOs...

OzForex will officially complete its sharemarket listing tomorrow, following the debut of the company on the Australian Stock Exchange last week. The initial public offering (IPO) saw shares trade from the outset at a handsome 28 percent premium to their $2 strike price. At time of writing shares are trading at $2.64.

The IPO valued the company at $562.43 million, and also flushed out a new substantial shareholder in the form of Solaris Investment Management, an equities fund manager, which has taken a 5 percent stake in the business.

OzForex specialises in managing international money transfers for individuals and businesses either under its own brand, or by providing access to its payments platform for use by third parties such as Macquarie Bank, Travelex and Moneygram. It competes head on with the banks, offering a flat fee for international transfers of $2000 to $10,000, and free transfers of amounts above $10,000. The organisation also generally offers slightly better exchange rates than the banks.

Unlike traditional banks OzForex is an online-only entity without the need to support bricks and mortar operations, or provide a full suite of banking services. In the year to the end of March the company, which was established in 1998, recorded after tax profits of $17 million – 30.6 percent higher than the year before.

While the result is a clear vote of confidence in the company’s ability to execute against its business model, it also suggests that there is an appetite for new technology stocks in Australia. While some Australian organisations – most notably software company Atlassian – are widely tipped to be saving their IPO plans for a Nasdaq listing in the US, other local organisations are planning a local listing.

Freelancer.com, a Sydney based online talent marketplace, has recently turned down a $424 million takeover offer from Japan’s Recruitco, instead signalling its plans to float on the ASX later this year. The company has just reached the 5 million projects milestone and has over 9 million individuals listed on the site.

OzForex’s experience suggests that there is appetite for and interest in local tech stocks, which will help bolster the Australian ICT sector for the longer term.

Post a comment or question...

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.

MORE NEWS: