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Shopify CEO Tobi Lutke, centre and wearing a hat, is celebrated as he rings the New York Stock Exchange opening bell on May 21, 2015.Richard Drew/The Associated Press

Asking an investment banker how the Canadian initial public offering market is in 2015 is a little like asking one of those burly Oktoberfest servers how stein sales are in Munich in October. Clearly, business is good right now. But how good is good? And will it last?

"The pipeline is as heavy as I've ever seen in my career," said Peter Miller, head of equity capital markets at BMO Nesbitt Burns Inc., who was speaking at the TSX Equities Trading Conference 2015 on Tuesday in Toronto.

"A lot of people are anxious to get to market," he added, and there is an "unbelievable pipeline."

It includes Hydro One Inc., which is expected to sell a minority stake later in the year, and possibly even Brazilian mining colossus Vale SA, whose base-metals unit has been talked about as a possible new listing in Canada.

This is not a one-trick-pony IPO market either, said Mr. Miller, as he talked up the "quality" and "diversity" of new IPOs that encompass companies in the retail, consumer, financial and technologies sectors and two SPACs (special purpose acquisition companies).

Mr. Miller also offered his take on why the IPO market is so strong – the long slow stretch since the 2008-09 financial crisis has given companies years of profitability to whip themselves into tip-top shape, he argued.

Public markets, he said, are also increasingly attractive to private-equity companies looking to cash out positions in existing assets (as opposed to buying public ones and taking them private).

Roman Dubczak, head of equity markets and wholesale banking at Canadian Imperial Bank of Commerce, who also spoke at the conference, wasn't as effusive in his view of the IPO market, instead saying that new issues are selling "quite well," but also noting "the odd IPO is off" in price.

Mr. Dubczak weighed in on the difference between tech IPOs (e.g. Shopify) now and circa 2000. Companies are more "mature" now than they were in the run-up to the dot-com crisis, he argued.

They are better funded and more stable.

Regarding the overall IPO market, he noted that investors are looking for "stability" in a new issue and he stressed the attractiveness of a dividend (if a company can offer one) as a selling point.

Looking toward the future, Mr. Dubczak noted that extremely low interest rates mean companies can also borrow to raise money.

The subtext seemed to be low rates could negate the need to raise money via an IPO in the first place.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
H-T
Hydro One Ltd
-0.25%39.5
VALE-N
Vale S.A. ADR
+0.16%12.19

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