Listed life – observations on FY25

FY25 was a year of all-time highs in financial markets, with equities able to look through all the issues and uncertainty from various geopolitical events throughout the year, including the wars in the Middle East and Ukraine, Trump’s on-and-off-again trade tariffs, a perceived end of American exceptionalism, and new developments in generative AI. Despite these global pressures, investor sentiment remained strong, reflecting a resilience that has underpinned capital markets throughout much of the post-COVID recovery.

In the US, Wall Street extended its rally on Friday 27 June, sending the S&P 500 and Nasdaq to all-time closing highs. Over the three months to June, the S&P gained 10.5 per cent, the Nasdaq rose almost 18 per cent, and the Dow Jones Index climbed 5 per cent. These are incredible results given the volatility and uncertainty out in the real world and the fact that the S&P ASX/200 index fell 7.45 per cent over three days following the April ‘Liberation Day’ tariff announcements. This is a reminder of the importance of managing expectations and market-facing messaging in times of policy volatility.

Back in Australia, the stock market story was dominated by the rise and rise of the Commonwealth Bank of Australia (CBA). CBA’s share price is up 46 per cent over the 12 months and continues to surprise. Some of this can be explained by the increase of passive investors and growing demand from concentrated superannuation funds with an expanding pool of capital to allocate. As many more of Australia’s ‘baby boomers’ begin to retire, however, there is growing debate among financial commentators and investor relations professionals as to whether this upward trend can be sustained as funds enter the drawdown phase.

Also supporting Australian equity markets, though to a far lesser degree, has been the consolidation of ASX-listed entities, a wave of private equity take-privates, and a notable lack of IPOs in 2024. These factors have reduced the investible universe for both institutional and retail investors. More recently, however, three major public offerings have marked a positive shift in capital markets activity: airline Virgin relisted on the ASX with a market cap of $2.53 billion; gold and copper producer Greatland Resources listed at $4.9 billion; and housing developer Gemlife floated with a market value of $1.648 billion.

It will be critical to get the attention of active fund managers for smaller companies going forward, telling a strong story given they do not benefit from passive investment flows. With many companies experiencing slowing earnings growth, or what some are calling a profit recession, missed guidance will continue to be punished. This underscores the need for carefully balancing messaging across financial results reports, AGMs and investor days. All of these key moments require clear, strategic communication. For boards and executives, navigating these disclosure events effectively will be vital in sustaining investor confidence, reputation and market value in FY26 and beyond.