Initial public offerings so far in 2013 have bounced back from a relatively poor showing for the same period last year, says a new report.
Total funds raised on Canadian equity markets have passed the $2-billion mark for the three quarters of 2013, up from $491-million in the year-earlier period, according to the latest quarterly PricewaterhouseCoopers survey of the IPO market.
Seven new offerings on all Canadian exchanges with a total value of $802-million in the third quarter easily beat the $271-million raised from seven IPOs in the same period of 2012, the survey indicates.
“IPOs from a diverse list of sectors like energy, banking, transportation and technology suggests broad interest in the Canadian IPO market,” PwC national IPO leader Dean Braunsteiner said in a news release Tuesday.
But he cautions that the last quarter of 2013 and the first part of next year are hard to predict given the lack of a “real ‘engine’ to drive the market.”
The $2-billion from 23 new issues so far this year, compared with $491-million from 39 IPOs in the year-earlier period make for a “modest success,” said Mr. Braunsteiner.
PwC says the largest new issue of the third quarter was Loblaw Cos. Ltd.’s $400-million Choice Properties Real Estate Investment Trust.
Added to the $294-million in REIT issues in the second quarter, the Loblaw issue extends the real estate sector’s stellar run in 2013, said Mr. Braunsteiner.
However, questions about when and by how much interest rates will increase make it difficult to forecast the future of the popular REIT vehicles, he said.
The REIT market is very sensitive to interest rate movements, and while there is at least one more major REIT issue to come, a rate hike makes for an uncertain long-term future for the sector, he said.
Mining, for a long time the dynamo of the Canadian IPO market, remains in the doldrums and there are scant signs of recovery, said Mr. Braunsteiner.