Fourth quarter saves IPO market from record low



    TORONTO, Jan. 7 /CNW/ - Fourth quarter activity in the resource sectors,
with a single large mining issue in the closing days of 2007, pulled the
Canadian market for initial public offerings (IPOs) above its lowest level in
recent history, the annual PricewaterhouseCoopers (PwC) survey of Canadian
equity markets has revealed.
    Even with a strong fourth quarter, the 2007 results were the lowest since
2001 when there was a recorded all-time low for the previous decade. In all,
90 IPOs made it to the TSX and TSX Venture exchanges for a combined value of
$3.4 billion. By comparison, 109 new issues worth $5.6 billion were issued on
those markets in 2006.
    There were 19 new issues in the last quarter of 2007 on the TSX with a
value of $2.1 billion, compared to five IPOs on the TSX with a value of
$987 million during the same period of 2006 - the period following the federal
government's change to the tax treatment of income trusts.
    The $1.1 billion fourth quarter IPO by Franco-Nevada on the TSX saved the
2007 results from resembling 2001. Without that offering, the value of IPOs on
the TSX and TSX Venture exchanges would have been $2.3 billion, just slightly
higher than $2.1 billion in 2001.
    For all of 2007, there were 36 new issues on the TSX with a combined
value of $3.0 billion, down from 54 IPOs worth $5.4 billion on that exchange
in 2006.
    The TSX Venture exchange recorded 15 new issues in the fourth quarter of
2007 with a combined value of $113 million, and closed out the year with
54 issues for a total value of $382 million. There were 55 new issues on the
TSX Venture in 2006 at a total value of $250 million.
    "A host of different factors conspired against the IPO market last year,"
observed Ross Sinclair, national leader of PwC's IPO and income trust
services.
    "The environment in 2007 was anything but predictable and stable,"
Sinclair said. "The impact of the loss of income trusts in the market was felt
most of the year, as potential issuers tried to chart a course for the future.
At the same time, there were wild swings in the market - volatility over weeks
and months that makes pricing a new issue almost impossible. And finally, the
uncertainty in the credit markets left many participants distracted and
alarmed. In many ways, it's amazing we got to the levels we did."
    Resurgent activity in the mining, energy and related sectors kept 2007
from being much worse, Sinclair believes, and points to a number of trends
worth watching as 2008 unfolds.
    "Activity in the fourth quarter of 2007 was restricted to very specific
areas - commodities, utilities and emerging renewable energy industries. With
more of these and other issues in the pipeline, the IPO market in these
sectors could find some momentum. But we don't see much diversity across the
market for new issues," Sinclair cautioned, "so any recovery is unlikely to be
broadly based. That makes predictions for 2008 very difficult."
    The annual PwC survey of Canadian equity markets breaks down IPO activity
into nine market sectors: consumer products, energy and utilities, financial
services, forest and paper, healthcare, industrial products, mining, oil and
gas, and technology. Activity is measured on the major national exchanges.

    About PricewaterhouseCoopers

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 140,000 people in 149 countries
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related entities have more than 5,200 partners and staff in offices across the
country.
    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.

    
                   Survey of Canadian IPO Capital Markets
                         January 2007 - December 2007

             Number and Gross Value of IPOs on Canadian Exchanges

    -------------------------------------------------------------------------
    Exchange     Number     Value (M $CDN)     Number     Value (M $CDN)
              Jan-Dec 2007   Jan-Dec 2007   Jan-Dec 2006   Jan-Dec 2006
    -------------------------------------------------------------------------
    TSX             36          3,043             54             5,384
    -------------------------------------------------------------------------
    TSX
     Venture        54            382             55               250
    -------------------------------------------------------------------------
    Other
     (CNQ,
     AIM)           10             26              7               166
    -------------------------------------------------------------------------
    Total          100          3,451            116             5,800
    -------------------------------------------------------------------------

        Number and Gross Value of IPOs on Canadian Exchanges (4th quarter
                                    only)

    -------------------------------------------------------------------------
    Exchange     Number     Value (M $CDN)     Number    Value (M $CDN)
              Oct-Dec 2007   Oct-Dec 2007   Oct-Dec 2006   Oct-Dec 2006
    -------------------------------------------------------------------------
    TSX             19          2,143              5               987
    -------------------------------------------------------------------------
    TSX
     Venture        15            113             15                79
    -------------------------------------------------------------------------
    Other
     (CNQ,
     AIM)            3              2              1                 1
    -------------------------------------------------------------------------
    Total           37          2,258             21             1,067
    -------------------------------------------------------------------------

                Number and Gross Value of IPOs by Sector 2007

    -------------------------------------------------------------------------
    Exchange        Sector              Number       Value (M $CDN)
    -------------------------------------------------------------------------
    TSX             Energy & Utilities     4               425
    -------------------------------------------------------------------------
                    Forest & Paper         1                40
    -------------------------------------------------------------------------
                    Healthcare             2               159
    -------------------------------------------------------------------------
                    Industrial Products    4               464
    -------------------------------------------------------------------------
                    Mining                16             1,560
    -------------------------------------------------------------------------
                    Oil & Gas              3               175
    -------------------------------------------------------------------------
                    Technology             6               220
    -------------------------------------------------------------------------
                    TSX Total             36             3,043
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    TSX-V           Consumer Products      1                 2
    -------------------------------------------------------------------------
                    Energy & Utilities     2                16
    -------------------------------------------------------------------------
                    Financial Services     1                 4
    -------------------------------------------------------------------------
                    Healthcare             1                 6
    -------------------------------------------------------------------------
                    Mining                40               239
    -------------------------------------------------------------------------
                    Oil & Gas              5                48
    -------------------------------------------------------------------------
                    Technology             4                67
    -------------------------------------------------------------------------
                    TSX-V Total           54               382
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Other           Consumer Products      1                 1
    -------------------------------------------------------------------------
                    Energy & Utilities     2                 1
    -------------------------------------------------------------------------
                    Mining                 6                 6
    -------------------------------------------------------------------------
                    Technology             1                18
    -------------------------------------------------------------------------
                    Other - Total         10                26
    -------------------------------------------------------------------------

           Top 10 Corporation IPOs - January to December 2007 (TSX)

    -------------------------------------------------------------------------
    Name                     Value (M $CDN)                   Sector
    -------------------------------------------------------------------------
    Franco-Nevada
     Corporation (Q4)              1,094                       Mining
    -------------------------------------------------------------------------
    Mecachrome
     International                                      Industrial Products -
     Inc. (Q4)                       206                    Transportation
    -------------------------------------------------------------------------
    Northstar
     Healthcare Inc.                 148                     Healthcare
    -------------------------------------------------------------------------
    Lockerbie & Hole Inc.            131                    Construction
    -------------------------------------------------------------------------
    Universal Energy
     Group Ltd.                      125                  Energy & Utilities
    -------------------------------------------------------------------------
    Innergex Renewable
     Energy Inc. (Q4)                115                  Energy & Utilities
    -------------------------------------------------------------------------
    EarthFirst Canada
     Inc. (Q4)                       113                  Energy & Utilities
    -------------------------------------------------------------------------
    Day4 Energy Inc. (Q4)            100                  Energy & Utilities
    -------------------------------------------------------------------------
    OceanaGold Corporation            90                       Mining
    -------------------------------------------------------------------------
    Centenario Copper
     Corporation (Q4)                 80                       Mining
    -------------------------------------------------------------------------
    Total                          2,202
    -------------------------------------------------------------------------

         Top 10 Corporation IPOs - January to December 2007 (TSX-V)

    -------------------------------------------------------------------------
    Name                     Value (M $CDN)                   Sector
    -------------------------------------------------------------------------
    B2Gold Corp (Q4)                  85                       Mining
    -------------------------------------------------------------------------
    Whitemud Resources Inc.           50                       Mining
    -------------------------------------------------------------------------
    Alter Nrg Corp.                   35                     Technology
    -------------------------------------------------------------------------
    Intercable ICH Inc.               21                     Technology
    -------------------------------------------------------------------------
    Argenta Oil & Gas Inc.            20                      Oil & Gas
    -------------------------------------------------------------------------
    Continental Nickel
     Limited                          17                       Mining
    -------------------------------------------------------------------------
    Painted Pony
     Petroleum Ltd.                   12                      Oil & Gas
    -------------------------------------------------------------------------
    Seaview Energy Inc. (Q4)          12                  Energy & Utilities
    -------------------------------------------------------------------------
    Queensland Minerals Ltd.          11                       Mining
    -------------------------------------------------------------------------
    Datacom Wireless
     Corporation                      10                     Technology
    -------------------------------------------------------------------------
    Total                            273
    -------------------------------------------------------------------------

                 Gross Values of IPOs on Canadian Exchanges
                 Historical Comparison 2001 - 2007 (M $ CDN)

    -------------------------------------------------------------------------
             2001     2002     2003     2004     2005     2006     2007
    -------------------------------------------------------------------------
    Number     46       69       56       87      119      116      100
    -------------------------------------------------------------------------
    Value   2,074    5,797    4,581    6,164    6,977    5,800    3,451
    -------------------------------------------------------------------------
    





For further information:

For further information: Susan MacDonald, MacDonald & Co., (416)
975-1572, susan.e.macdonald@bellnet.ca; Jonathan Hicks, PricewaterhouseCoopers
LLP, (416) 869-2449, jonathan.hicks@ca.pwc.com

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