Stock Investment Tips by Anthony Raymond Cunningham

In Australia over half of the companies listed on the ASX are junior companies or Mid Cap’s.  1,600 of these companies in total are listed.

More than half are from the resources sector, centered in Western Australia. Around 45% of the listed companies and managed investment schemes on ASX’s market were from the resources sector.

Mid to small caps can be seen as a more “speculative” investment, limiting their ability to regularly return to existing shareholders for further contributions of capital. Placements are therefore a crucial source of capital. Analysis of capital raising in 2011 showed that placements provided close to 70% of the secondary capital needs for mid to small caps. Smaller resource companies are typically not revenue producing, do not have access to debt finance or venture capital. They rely on equity capital – and particularly placements – for their funding needs. Placements provide close to 70% of the secondary capital needs for mid to small caps

Mid to small cap resource companies also dominate ASXs IPO pipeline. In 2011, 108 mid to small caps raised (in total) $3 billion by IPO. The majority of these listed with a market capitalization of less than $25 million.

• Mid to small cap entities account for 76% of the total number of listed companies

• They account for 6% of total market capitalization

• 52% of mid to small cap entities are resource companies

186 companies are actively exploring or producing in Africa alone.