TORONTO, April 4 /CNW/ - The Canadian market for initial public
offerings took a breather in the first quarter of 2011 as volatility
and geo-political risks put equity markets on a rollercoaster ride in
the opening months of the year, the quarterly PwC survey of IPO
activity on Canadian equity exchanges released today shows.
The first three months of 2011 had less than $200 million from 13 issues
of new equity on all Canadian exchanges, down from 16 new issues with a
total value of $464 million in the same period of last year, the survey
shows. The TSX saw two issues with a value of $110 million in the first
quarter of this year vs four IPOs valued at just over $442 million in
the comparable period of 2010.
The lack of IPO activity in the first quarter is a pause in the market's
recovery rather than something more dire, according to Neil Manji, PwC
national IPO Services leader.
"We had a very robust IPO market coming into the end of last year, and a
number of new issues were pulled forward into 2010 to take advantage of
the strong market. Combined with what is a traditionally slower quarter
for IPOs, the result was even lower activity for Q1," Manji explains. A
total of $1.2 billion in new issues came to market in the fourth
quarter of 2010.
Political events in the Middle East, sovereign debt concerns in Europe
and the natural disasters in Japan also contributed to volatility in
equity markets in the first quarter, Manji adds. But with the US
economy on the mend and market sentiment in Canada improving as we
enter the second quarter, and some IPOs already in the pipeline, the
market should recover some of its momentum through 2011, he says.
The total Canadian IPO market accounted for $5.5 billion in new equity
The largest IPO during the first quarter of 2011 was the $75 million
issue from Bauer Performance Sports Ltd. on the TSX. Ten IPOs on the
TSX Venture exchange with a value of more than $87 million in the first
quarter was down from the 11 IPOs worth $21 million on that exchange in
the same period of 2010.
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.
For more information, please visit www.pwc.com/ca/iposurveys
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