TORONTO, July 2, 2013 /CNW/ - Resilient demand for real estate
investment trusts (REITs) helped the Canadian market for initial public
offerings (IPOs) shift gears in the second quarter, according to the
latest PwC IPO market survey.
Real estate was the most active sector in the second quarter of 2013,
helping to push total proceeds from all Canadian exchanges to a value
of $870 million from 13 new issues. Six IPOs on the TSX contributed
$856 million to the total for the quarter.
Four new issues of REITs represented $293 million of activity in the
three-month period ending June 30, 2013, the PwC survey revealed.
The relative strength of the real estate sector comes as no surprise to
Dean Braunsteiner, PwC national IPO services leader. "Real estate is an
area of stability and growth, something rare in a volatile market,"
says Braunsteiner. "With more REITs in the pipeline, including a
substantial issue coming from Loblaws, the real estate sector has
largely steered around the market volatility of the last few weeks."
The largest new issue on the TSX in the second quarter came from BRP
Inc., a company spun out of Bombardier that manufactures snowmobiles
and personal watercraft, which raised $262 million. The second largest
IPO of the quarter was the $250 million issue of new equity by Oryx
Petroleum Corporation Limited - the only activity in the oil and gas
"The success of the BRP and Oryx Petroleum issues send reassuring
signals about the potential for the IPO market in Canada - if we can
get through the current period of instability," Braunsteiner adds. "The
fact that Oryx, an exploration company with properties in Africa and
the Middle East, chose the TSX for its IPO says companies in the
extractive sector still look to Canada for our understanding of those
Mining IPOs, however, continue to lag behind the usual pace of activity
in that sector, Braunsteiner notes. "Mining is still in a slump," he
says, "with depressed commodity prices weighing down any prospects for
a turnaround." While financing alternatives may exist for miners in
early stage production, true juniors in the exploration business have
few options. "We may be looking at a period of consolidation for
juniors," says Braunsteiner.
Second quarter activity helped raise the total proceeds from all
Canadian exchanges to $1.3 billion for the first half of 2013, far
ahead of the $220 million total for the first six months of 2012. There
were 17 IPOs on all Canadian exchanges in the first half of 2013 vs 32
new issues during the same period of 2012.
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.
About PwC Canada
PwC Canada helps organizations and individuals create the value they're
looking for. More than 5,700 partners and staff in offices across the
country are committed to delivering quality in assurance, tax,
consulting and deals services. PwC Canada is a member of the PwC
network of firms with more than 180,000 people in 158 countries. Find
out more by visiting us at www.pwc.com/ca.
© 2013 PricewaterhouseCoopers LLP, an Ontario limited liability
partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the
PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
SOURCE: PwC Management Services LP
For further information:
T: +1 416 687 8644
T: +1 613 966 4969