* IPOs could double in 2018, with large listings driving volume
* Conditions helpful due to equity rally and absence of big deals
* Spin-offs seen from Vodafone , Commonwealth Bank, others -sources
By Paulina Duran
SYDNEY, Jan 2 (Reuters) - Australian IPO fundraising could double this year to around A$10 billion ($7.84 billion) from five-year lows in 2017, with firms such as Deutsche Bank-backed Latitude Financial poised to capitalise on rallying markets and investor craving for big deals.
Bankers around the world are looking to the global stock market rally of the past year to kick-start a series of big floats and spin-offs, following years of caution and balance sheet repair by companies that led to a lacklustre market for initial public offerings (IPOs). floats in Sydney last year raised just $3.9 billion - the lowest since 2012, Thomson Reuters data shows as debt-fuelled foreign buyers snapped up companies that could otherwise have pursued a listing.
"We could reach the A$8 billion to A$10 billion mark," said Richard Sleijpen, UBS head of equity capital markets, of the 2018 pipeline. "Speculated, announced and strategic review processes suggest very strong IPO volumes for this year."
Expected deals include mortgage provider Latitude Financial, partly owned by Deutsche Bank DBKGn.DE and KKR & Co. LP KKR.N . The company is valued at about A$5 billion and last month appointed lead managers to help raise about A$2 billion, according to two sources who declined to be identified because the plans are private.
Latitude's senior executives did not immediately reply to an emailed request for comment on the company's IPO plans. Group Treasurer Paul Varro did not immediately return a voice message left after office hours.
Commonwealth Bank of Australia (CBA) CBA.AX is also considering an IPO of its asset management business - Colonial First State Global Asset Management (CFSGAM) - as part of a series of divestments. It sold its insurance unit to AIA Group 1299.HK in September. has A$219 billion in assets under management and could be listed to raise about A$3 billion this year, the sources said.
Vodafone Group VOD.L is also planning to spin off its New Zealand subsidiary in a deal expected to raise about A$1 billion, the sources added.
CBA and Vodafone have said previously they are exploring listing their units. A Vodafone spokeswoman said on Tuesday no final decision had been taken on an IPO for the New Zealand unit. A CBA spokesman said the bank continued to review its options for the unit but declined to confirm the size of the potential float.
"The investment community has been starved of IPOs of well established businesses - that is one of the main reasons why we see a very strong demand for listings in 2018," said one senior banker who declined to be identified because the banker was not authorised to speak with the media.
Origin Energy Ltd ORG.AX sold its gas assets to Beach Energy for $1.25 billion, after actively exploring a listing of the business last year. disappointment came from TPG Capital Management which was working towards a listing of Alinta Energy but opted to sell to Hong Kong conglomerate Chow Tai Fook Enterprises for nearly A$4 billion. Sleijpen said that in some cases last year, the sellers viewed outright sales as more certain than the IPO market, but added that equity market dynamics had changed.
"Investor sentiment is quite bullish going into 2018, and that has been fuelled by a more stable market - as we haven't seen the kind of volatility that we saw leading into 2017 - and the prospect of synchronized global growth, where most economies are in a reasonably good position to continue to grow this year," he said.
Australia's ASX 200 .AXJO rose 7 per cent last year, its best performance since 2013, as a surge in commodity prices lifted miners, helping offset a subdued performance by the country's biggest banks and insurers. Equity analysts have forecast gains of up to 8 per cent this year. ($1 = 1.2760 Australian dollars)
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