TORONTO, Jan. 3, 2013 /CNW/ - A $1.3 billion surge of new equity issues
in the fourth quarter helped turn around the 2012 Canadian IPO market
and raises hopes for growth in 2013, the annual survey of Canadian
equity markets by PwC has revealed.
Nine new issues on the TSX in the last three months of 2012 helped power
the final quarter of the year to a total of $1.3 billion in new equity,
according to the PwC survey. There were 23 IPOs on all Canadian
exchanges during the period, compared to 10 new issues worth just $52
million in the last quarter of 2011.
After a very slow start to the year, the strong fourth quarter leaves
2012 with a total of 62 IPOs on all exchanges, delivering $1.8 billion
in new equity for the year. There were 61 IPOs on Canadian exchanges in
all of 2011 for a total of $2 billion.
The fourth quarter of 2012 was notable for the diversity of new issues
as well as for the size of the total proceeds, says Dean Braunsteiner,
PwC national IPO services leader.
"We're used to the mining sector playing an important role in the
Canadian IPO market, but the miners shared the spotlight in the last
quarter with the consumer products, retail, energy and real estate
sectors," explains Braunsteiner. "The results of the last quarter not
only speak to the pent-up demand for equity capital, they are a
testament to the underlying strength of the larger Canadian economy."
"We went from a disappointing start to a reasonable outcome in 12
months," says Braunsteiner. "We didn't set any records, but it's
gratifying when you consider where we've been."
Braunsteiner points to the fourth quarter of 2012 - the strongest
quarter since the second quarter of 2011 - and the backlog of IPOs
still in the pipeline as the foundation for a good start to 2013.
"We've seen a lot of IPOs in the development stage, across numerous
sectors," he reports.
Despite the optimism at the close of 2012 it's not all clear sailing,
Braunsteiner cautions. "The usual caveats still apply. Issues left
unresolved by the 'fiscal cliff' negotiations in the U.S. will continue
to hang over that market, and we are far from a resolution of the debt
crisis in Europe. Caution is still the watchword," he adds.
Only 12 new issues made it to the TSX in 2012 for a total of $1.7
billion, the PwC survey showed. In 2011, 15 IPOs debuted on the TSX with a value
of just less than $1.8 billion. The TSX Venture hosted 44 IPOs in 2012
with proceeds totaling $107 million, compared to 45 new issues worth
$214 million in 2011.
The $365 million IPO of retailer Hudson's Bay Company in the fourth
quarter was the largest of the year. The $301 million raised by mining
company Ivanplats Limited was the second largest and the biggest new
offering of the year from the minerals sector, also in the fourth
quarter. Argent Energy Trust raised $212 million in the third quarter,
the largest IPO from the energy sector.
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.
Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at www.facebook.com/pwccanada.
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SOURCE: PwC (PricewaterhouseCoopers)
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