New low looms for Canadian IPO market, PwC survey shows



    TORONTO, Oct. 2 /CNW/ - Barring a surge in activity in the final quarter
of the year, the 2007 Canadian market for initial public offerings appears
headed for its lowest year in a decade, a survey by PricewaterhouseCoopers
(PwC) reveals.
    The third quarter of 2007 saw just 22 of new issues on Canadian exchanges
for a total value of $337 million, the survey shows. The trickle of new issues
brings the total number of new issues to 63 for the first three quarters of
the year. The value of new issues during the period reached $1.2 billion.
    By comparison, the third quarter of 2006 saw 33 new issues on Canadian
exchanges for a value of $650 million. In the first nine months of 2006, there
were 95 IPOs on Canadian exchanges with a value of $4.7 billion.
    "At the current rate of activity, it is unlikely we will even reach the
ten-year low-water mark, set in the aftermath of the collapse of tech stocks
in 2001," observes Ross Sinclair, national leader for PwC's IPO and income
trust services. Just 46 new issues with a total value of $2.1 billion were
registered in 2001, Sinclair says. "We will need almost $1 billion of activity
in the fourth quarter just to match the 2001 results."
    Just four new issues made it to the TSX in the third quarter of 2007. The
total value of IPOs on the TSX during the quarter was $255 million. The
largest third quarter IPO on the TSX was the $131 million issue by Lockerbie &
Hole Inc.
    The TSX Venture exchange continued to fair much better, recording 15 new
issues in the third quarter for a total of $79 million for the quarter.
Sinclair credits high metal and commodity prices for the continued strength of
new mining issues on the Venture exchange.
    A confluence of events has created "a tepid and fragile IPO market
environment" in Canada, Sinclair says. "The loss of the market for income
trusts last October has had a number of knock-on effects," he contends. "Not
only did a huge segment of the market disappear, it created a feeling of
uncertainly among both investors and issuers. There would appear to be a
significant perception of a 'policy limbo' as we see new proposals for the tax
treatment of trusts proposed against the background of a possible federal
election. In a market with so much uncertainty, everyone is treading
carefully."
    The market for new equity issues tumbled in the last quarter of 2006
following the announcement by the federal government of a new policy on the
taxation of income trusts. There were 116 new issues with a value of $5.8
billion in all of 2006.

    About PricewaterhouseCoopers

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
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clients and their stakeholders. More than 140,000 people in 149 countries
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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 - September 2007

             Number and Gross Value of IPOs on Canadian Exchanges

    -------------------------------------------------------------------------
    Exchange      Number      Value (M $CDN)     Number        Value (M $CDN)
              Jan-Sept 2007   Jan-Sept 2007   Jan-Sept 2006    Jan-Sept 2006
    -------------------------------------------------------------------------
    TSX             17             899             49              4,397
    -------------------------------------------------------------------------
    TSX Venture     39             269             40                171
    -------------------------------------------------------------------------
    Other
    (CNQ, AIM)       7              24              6                165
    -------------------------------------------------------------------------
    Total           63           1,192             95              4,733
    -------------------------------------------------------------------------

     Number and Gross Value of IPOs on Canadian Exchanges (3rd quarter only)

    -------------------------------------------------------------------------
    Exchange     Number       Value (M $CDN)      Number       Value (M $CDN)
             July-Sept 2007   July-Sept 2007  July-Sept 2006   July-Sept 2006
    -------------------------------------------------------------------------
    TSX              4             255             13                576
    -------------------------------------------------------------------------
    TSX Venture     15              79             19                 73
    -------------------------------------------------------------------------
    Other
    (CNQ, AIM)       3               3              1                  1
    -------------------------------------------------------------------------
    Total           22             337             33                650
    -------------------------------------------------------------------------

             Top 5 Corporation IPOs - January to September (TSX)

    -------------------------------------------------------------------------
             Name             Value (M $CDN)             Sector
    -------------------------------------------------------------------------
    Northstar Healthcare Inc.       148                Healthcare
    -------------------------------------------------------------------------
    Lockerbie & Hole Inc. (Q3)      131    Industrial Products - Construction
    -------------------------------------------------------------------------
    Universal Energy Group Ltd.     125            Energy & Utilities
    -------------------------------------------------------------------------
    OceanaGold Corporation (Q3)      90                  Mining
    -------------------------------------------------------------------------
    Petro Andina Resources Inc.      60                Oil & Gas
    -------------------------------------------------------------------------
    Total                           554
    -------------------------------------------------------------------------

            Top 5 Corporation IPOs - January to September (TSX-V)

    -------------------------------------------------------------------------
    Name                      Value (M $CDN)             Sector
    -------------------------------------------------------------------------
    Whitemud Resources Inc.          50                  Mining
    -------------------------------------------------------------------------
    Alter Nrg Corp.                  35                Technology
    -------------------------------------------------------------------------
    Intercable ICH Inc.              21                Technology
    -------------------------------------------------------------------------
    Argenta Oil & Gas Inc. (Q3)      20                 Oil & Gas
    -------------------------------------------------------------------------
    Continental Nickel Limited (Q3)  17                  Mining
    -------------------------------------------------------------------------
    Total                           143
    -------------------------------------------------------------------------

                 Gross Values of IPOs on Canadian Exchanges
               Historical Comparison 1998 - 2007 (M $ Canadian)

    -------------------------------------------------------------------------
            1998   1999   2000   2001   2002   2003   2004   2005   2006 2007
    -------------------------------------------------------------------------
    Six
    month
    Value $3,192 $2,200 $4,413 $1,525 $2,273 $1,483 $2,630 $2,590 $4,083 $855
    -------------------------------------------------------------------------
    Six
    month
    Number    73     40     44     32     30     22     32     34     61   41
    -------------------------------------------------------------------------
    Year-
    end
    Value $4,066 $6,741 $6,835 $2,074 $5,797 $4,581 $6,164 $6,977 $5,800
    -------------------------------------------------------------------------
    Year-end
    Number   114     92    100     46     69     56     87    119    116
    -------------------------------------------------------------------------
    




For further information:

For further information: Susan MacDonald, MacDonald & Co., (416)
975-1572, susan.e.macdonald@bellnet.ca; Carolyn Forest, PricewaterhouseCoopers
LLP, (416) 814-5730, carolyn.forest@ca.pwc.com

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