TORONTO, July 3, 2012 /CNW/ - The quarterly survey of Canadian equity
markets by PwC revealed only two new issues on the Toronto Stock
Exchange (TSX), leaving the Canadian market for initial public
offerings (IPOs) stalled in the second quarter of 2012.
The two issues on the TSX in the second quarter, with a total value of
$185 million, were both real estate trusts. They were the only IPOs on
the TSX in the first half of 2012, the PwC survey showed.
With 12 IPOs registered on the TSX Venture and five on the CNSX, the
total number of new equity issues in the second quarter reached 17 with
a total value of $199 million.
The 32 new issues on all Canadian exchanges in the first half of 2012
generated $220 million in new equity, a significant drop from the first
half of previous year. By comparison, there were 34 IPOs on Canadian
exchanges in the first half of 2011 with a value of $1.4 billion.
The European debt crisis, a global softening of commodity prices and the
resultant market volatility conspired to keep both issuers and
investors on the sidelines, says Dean Braunsteiner, PwC national IPO
services leader, while the controversial Facebook IPO in the U.S.
failed to ignite interest in the technology sector during the quarter.
"The interest in REITs is testimony to the enduring appeal of the yields
from real estate, and the single bright spot in the second quarter,"
Braunsteiner observes. "But sagging commodity prices and the recent
slide in the price of oil have made it very difficult for companies in
those normally active sectors to plan new issues. Caution will be the
watchword for the next few months."
A PwC survey of U.S. equity markets showed a sharp decline in IPO
activity at the end of the second quarter (http://www.pwc.com/us/en/press-releases/2012/q2-ipo-watch-press-release.jhtml). Braunsteiner notes, "While the U.S. market slowed abruptly at the end
of the quarter, that hasn't dimmed optimism there."
Braunsteiner concludes, "There are still some significant IPOs in the
pipeline in the U.S. The challenge for them and for the new issues we
see coming in Canada, will be timing."
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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