Brian Gaynor Blog

A total of 77.4 million Kathmandu shares, or a phenomenal 38.7% of the company, were traded on Friday. This was a huge bonanza for brokers but raises questions about the IPOs distribution policies.

A total of 66.1 million shares were traded on the ASX and 11.3 million shares on the NZX. Based on these figures Australian investors now own around 85% of the 200 million shares on issue with New Zealand investors owning 15%.

There are only five New Zealand shareholders in the top twenty shareholders list, including chief executive Peter Halkett with 0.70%. The top twenty shareholders own 50.4% of the company with the five New Zealand holders in this group owning 4.4%. This suggests that the New Zealanders could own less than 15% of Kathmandu.

First day trading volumes were huge, even compared with Myer which listed on the ASX on 2 November. These are some of the comparisons;

-         Kathmandu has 200 million shares on issue whereas Myer has 581.5 million shares

-         Kathmandu had only 4,955 shareholders on listing whereas Myer had 59,337 shareholders

-         Kathmandu distributed 52.0% of the new shares to institutions compared with 43.8% by Myer

-         38.7% of Kathmandu was traded on the first day compared with 22.4% of Myer.

Institutions don’t have to settle for their Kathmandu shares until Tuesday 17 November so a large number of them have probably sold out at a quick profit before payment is due.

It appears that Australian small cap investment managers, particularly those that like companies with strong brand names, were net buyers on day one. Continued interest by these Australian small cap managers will have an important bearing on Kathmandu’s share price performance.