Eight Trends Shaping Equity Capital Markets in 2026
2026-10-20
In 2026, Australia’s equity capital markets have been shaped by a range of emerging trends: from geopolitical disruption to the rise of AI, the regulatory modernisation of ASIC rules, structural shifts in how capital is deployed and an increasingly assertive enforcement posture from ASIC. Here we examine eight key trends and their current impact on Australia’s capital markets.
1. War Disrupts Markets
What’s happening?
The US-Iran conflict, which escalated in February 2026 against the backdrop of the ongoing Russia-Ukraine war, has had a pronounced impact on Australian equity capital markets. The ASX 200 began close to its all-time high before falling more than 8% through March as hostilities intensified and the Strait of Hormuz was closed to commercial shipping. The escalation sent oil prices surging, heightened marked volatility and paused IPO pipelines across the region including Australia.
What are some examples?
For Australia as a major energy exporter, ASX energy stocks increased sharply during the initial conflict phase. However, materials stocks fell given concerns over demand and associated cost pressures.
Adding to the geopolitical turbulence, in January 2026 the United States launched a military strike in Venezuela and announcing plans to rebuild the country’s oil infrastructure. While the immediate market reaction was muted – Venezuelan supply accounts for only around 1% of the global oil market – the raid added to investor uncertainty.
Conflict has had a chilling effect on what was expected to be a strong year for Australian IPO activity. Geopolitical uncertainty, rising oil prices and an uncertain interest rate outlook gave investors reason for caution. Many IPO candidates took a cautious approach, delaying their plans until conditions stabilised. In the first half of 2026, only 17 companies listed on the ASX, and while that was more than the prior corresponding period, average total capital raised declined significantly.
What’s next?
While, as of September 2026, markets appear to be responding to the global tensions as a serious but potentially short-lived disruption rather than a structural shift, unfortunately, we don’t expect an outbreak of global peace. Responses to conflict risk, sustained inflation and higher interest rates, place a further burden on the markets.
The geopolitical environment has also heightened compliance risks for companies raising capital. Australia has expanded its autonomous sanctions regime throughout 2025 and 2026, with new designations under the Autonomous Sanctions Act 2011 (Cth) targeting Iranian officials and additional Russian vessels. For listed companies, sanctions diligence extends to dealings with designated persons and entities, asset freezes, use of proceeds, counterparties and supply chain exposure: all of which may require careful attention in IPO and placement documentation.
More broadly, the conflict has renewed focus on the drafting of force majeure, material adverse change and market disruption clauses in underwriting agreements and offer documents. A reminder that condition clauses in ECM documentation must address the possibility of further supply shocks.
2. Regulators Seek to Revitalise the Public Market
What’s happening?
Both ASIC and the ASX have embarked on complementary programmes of regulatory reform aimed at making Australia’s public equity markets more attractive and competitive. This follows a period of subdued IPO activity and the rapid growth of private capital raising regulatory concerns.
In February 2025, ASIC released a discussion paper exploring the evolving dynamics between private and public markets. Following over 100 submissions, ASIC published Report 823, setting out a roadmap for reform and stating that “Australia and ASIC want to be backers, not blockers of investment and capital”.
What are some examples?
One of the reforms arising from Report 823 has been ASIC’s two-year fast-track IPO trial. This trial allows eligible companies (with a market capitalisation exceeding $100 million and no ASX-imposed escrow) to submit a prospectus for informal ASIC review two weeks ahead of lodgement and to accept retail applications during the exposure period. This aims to reduce the IPO timetable by up to one week, cutting the period during which investors are “on risk” before securities can be traded on market.
Another upcoming reform is to pre-IPO advertising rules. In Consultation Paper 390, released in August 2026, ASIC proposes to modernise the pre-lodgement IPO advertising rules to allow companies to communicate with investors before lodging a prospectus. The proposals aim to “narrow an unnecessary part of the gap between capital raising rules in public and private markets”, while maintaining the prospectus as the primary disclosure document for investment decisions.
In June 2026, the ASX released an exposure draft proposing a 25% cap on the amount of new shares that S&P/ASX 300 companies can issue in public takeovers without shareholder approval. This reform, which responds to heightened investor scrutiny of dilutive M&A transactions, aims to strengthen shareholder protections while maintaining deal execution certainty.
In January 2026, the ASX established a new Advisory Group on Corporate Governance, chaired by former Reserve Bank Governor Dr Philip Lowe. In July 2026, the ASX opened consultation on a draft 5th edition of its Corporate Governance Principles and Recommendations, which seeks to refine the existing framework and modernise disclosure expectations for listed entities.
What’s next?
Further reforms are expected, including ASIC’s review of prospectus disclosure requirements and potential changes to streamline dual listings. Consultation on pre-lodgement IPO advertising rules closes on 11 September 2026. Looking further ahead, the ASX has indicated that a move to T+1 settlement may be considered after the delivery of CHESS Release 2, with a transition timeline of at least 12 to 18 months following the Release 2 go-live date. However, in our view, more can be done and we hope to see ongoing efforts in this space.
3. AI and Digital Infrastructure Supercharge Capital Flows
What’s happening?
The rapid development of artificial intelligence (AI) and digital infrastructure has become a dominant driver of equity capital markets activity in Australia. The ASX has identified AI and AI-supporting businesses (including data centre developers) as “standout themes” expected to continue to attract strong investor focus in 2026 and beyond.
Companies such as Nvidia, Vantage and BlackRock have deployed billions in the sector, and the trend is continuing in Australia, with ASX-listed companies attracting significant new investment through follow-on raisings and IPOs.
What are some examples?
One of Australia’s larger infrastructure companies, the Goodman Group, has heavily pivoted into data centre development, raising $4 billion via an institutional placement and share purchase plan to fund global data expansion.
Similarly, SCX.ai recently listed on the ASX following a $40 million IPO. This made it one of Australia’s early mover ASX listed AI infrastructure companies.
In September 2026, NEXTDC launched a $1.1 billion subordinated convertible notes offering - its third capital raising in just over four months - to fund its Australian development pipeline. NEXTDC has raised $9.75 billion during FY26 alone - comprising $5.8 billion in senior debt, $750 million in subordinated notes, $1.7 billion in hybrid securities and $1.5 billion in equity illustrating the scale of capital now flowing into AI-enabling infrastructure.
What’s next?
The AI infrastructure sector will continue to be a significant driver of equity capital markets activity in Australia and globally. Until recently, Firmus Technologies, an Nvidia-backed data centre developer was widely expected to pursue what could have been one of the ASX’s largest listings since Telstra in 1997. However, the proposed float appears to have hit trouble, with Firmus withdrawing its IPO in October 2026 and electing to pursue private funding instead. This development shows that, despite strong enthusiasm from investors for AI technology, public investor appetite remains highly selected where ambitious price and execution risk exist.. Several other AI-related IPOs are in development, including Sharon AI, which has recently produced its prospectus for potential investors.
Companies and investors in the AI infrastructure sector should also be alert to the evolving foreign investment framework. In May 2026, the Treasurer announced reforms to the FIRB regime, including an expanded associate definition, a new non-ownership call-in power and mandatory approval requirements for investments in certain sectors yet to be identified. For data centre investments involving foreign cornerstone investors, navigating FIRB will become a critical-path item.
4. Energy and Critical Minerals Fuel Capital Raising
What’s happening?
In 2026, the resources sector continues to dominate Australia’s equity capital markets. The ASX announced that materials were the largest source of new listings in FY26, with 30 new listings in the metals and mining sector. In particular, there has been significant investor interest in gold, silver, copper, lithium and critical minerals.
The growing demand for electric vehicle battery materials and the global push for renewable energy is channelling capital towards rare earth metals, uranium and lithium. At the same time, demand for gold has continued to accelerate, with gold prices reaching all-time highs. This momentum has been reflected in a number of gold-focused IPOs listing on the ASX in early 2026.
What are some examples?
Earlier this year, L1 Gold Fund, a gold-focused investment fund, raised $950 million in an IPO – the largest raising of 2026 to date.
In the critical minerals space, Daly Resources and Barkly Rare Earths also listed, reflecting investor demand for strategic metals linked to defence and energy transition.
What’s next?
With the ASX announcing that the “IPO pipeline entering FY27 is the strongest it has been in four years”, metals and mining is expected to remain a core sector driving performance. ASX has ranked first globally by volume of follow-on transactions in nine of the past ten financial years, confirming its position as a leading venue for resource-sector capital raising.
A significant legal development for the resources sector, amongst other sectors, is the commencement of Australia’s mandatory merger control regime on 1 January 2026. Under Part IVA of the Competition and Consumer Act 2010 (Cth), acquisitions triggering certain thresholds must now be notified to the ACCC and await clearance before completion. Capital raisings intended to fund acquisitions must now build in ACCC timing risk, and underwriting agreements should address risk that clearance is delayed or refused.
The interaction with FIRB adds further complexity: FIRB now requires applicants to disclose whether a transaction will also be notified to the ACCC, and Treasury may refer transactions to the ACCC if competition concerns arise, requiring parallel regulatory processes to be carefully sequenced.
Author：KHQ Lawyers：Toby Norgate / Paul Chatziopoulos
