The Australian firm, which is separate from the New Zealand company of the same name, raised nearly A$45.5 million (NZ$49.8 million) from selling 37% of the company.
During the float process, the company had to scale back its asking price from A$1.20 to A$1.05.
"It’s yielding 8% at that price which is reflective of pretty good value," Macquarie Equities analyst Stephen Kench saya.
During the float process, there was "a fair amount of fear relating to the mortgage market and the position of brokers within that market," Kench says.
While some in the mortgage broker camp in Australia believe brokers’ share of the market can climb from 30% currently to 50%, Kench and other analysts aren’t so sure. The top five players in the broker market command about 50% market share, suggesting the market is starting to mature.
The Australian industry is also facing the impact of a cooling housing market after an even bigger boom than New Zealand has experienced. According to the Market Intelligence Strategy Centre, the number of active brokers in the industry is falling. Mortgage Choice claims about 18% of the Australian mortgage broker market.
Given the contracting market, it isn’t surprising that the major banks are reconsidering their involvement with mortgage brokers. In the past month, both Westpac and ASB Bank’s parent Commonwealth Bank of Australia, have announced reviews of the way they remunerate mortgage brokers in Australia.
Shares in New Zealand’s only listed mortgage broker, Mike Pero Mortgages, are also languishing. They are currently trading at 90 cents compared with their $1 issue price in April.
That’s despite the company saying a month ago that it traded better than expected during the four months ended June and will exceed its prospectus forecast by about 20%.
