TORONTO, Oct. 1, 2013 /CNW/ - Third quarter initial public offerings
(IPOs) from a diverse array of sectors helped push total funds raised
on Canadian equity markets to more than $2 billion so far in 2013, the
quarterly PwC survey of the IPO market shows, but a depressed mining
sector and questions about interest rates make the balance of the year
difficult to predict.
Seven new offerings on all Canadian exchanges with a total value of $802
million in the third quarter out-paced the $271 million raised from
seven IPOs in the same period of 2012, the PwC survey revealed. Five
IPOs on the TSX raised $798 million during the third quarter of 2013 in
comparison to a single new issue for $212 million in the same period of
The largest new issue of the quarter was the $400 million Choice
Properties Real Estate Investment Trust from Loblaws. Added to the $294
million in REIT issues from the second quarter, this offering extended
the real estate sector's star performance in 2013, notes Dean
Braunsteiner, PwC national IPO leader. But questions about when - and
by how much - interest rates will increase have made the future of the
popular REIT vehicles difficult to predict, Braunsteiner says.
"IPOs from a diverse list of sectors like energy, banking,
transportation and technology suggests broad interest in the Canadian
IPO market," Braunsteiner adds, "but lacking a real 'engine' to drive
the market, the last quarter of 2013 and the first part of 2014 will be
hard to predict."
The REIT market is very sensitive to interest rates, Braunsteiner
explains, and even though at least one more major REIT issue is in the
pipeline, an increase in rates leaves the long-term future of the
sector as a question mark. The mining sector, long the engine of the
Canadian IPO market, is still in the doldrums and shows no signs of
recovery in the short term, Braunsteiner says.
The $2 billion in new equity raised from 23 new issues in the first
three quarters of 2013 makes the year so far a modest success, he adds,
ahead of the $491 million from 39 IPOs in the same period of 2012.
PwC has conducted its survey of the IPO market in Canada for more than
10 years. The reports are issued on a quarterly basis to provide
information to the corporate sector, investors, the media and others
that will help them put the market into better perspective. For the
purposes of the survey, investment vehicles such as structured products
are not considered IPOs because they do not represent new equity raised
for operating companies.
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SOURCE: PwC Management Services LP
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