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The volatility that roiled commodity and financial markets in the final months of 2018 is casting a cloud of uncertainty over the market for initial public offerings in the year ahead.

A slowdown in capital raising by the resource sector made 2018 a tepid year for IPOs, with 15 companies raising $1.74-billion via IPOs as of mid-December. That compares with 23 IPOs raising $4.76-billion over the course of 2017, according to data from Refinitiv.

The energy and mining sectors were largely responsible for the declines.

“It’s not that markets were closed, it’s just that when you look at Canada, those sectors that are so important to us were out of vogue and had unique reasons why they were not in need of, or unwilling to, raise capital,” said Peter Miller, head of Canadian equity capital markets at BMO Nesbitt Burns.

And if market volatility – driven by trade wars, rising interest rates and fears of slowing global economic growth – continues, 2019 could look similar.

BMO has a solid pipeline of IPOs in the works across a variety of sectors, including three technology firms that plan to go public in the first half of 2019, Mr. Miller said.

Absent the “big, chunky deals” of the past it’s unlikely to be a record-breaking year for initial public offerings, he added. Currently, the deal sizes look to be in the $150-million to $300-million range. “Right now, we don’t have any visibility on that billion-dollar-plus IPO that would make it a great year,” Mr. Miller said.

Tech is expected to be the bright spot in the year ahead. In the U.S., ride-sharing companies Uber Technologies Inc. and Lyft Inc. have plans to go public, while other well-known tech names such as Airbnb Inc. and Slack Technologies Inc. are said to be mulling public offerings as well.

Canada doesn’t have as many market-ready companies as the United States, “but there might be a few,” said Roman Dubczak, head of global investment banking for CIBC World Markets Inc.

“It might actually be a fairly reasonable year in terms of corporate finance,” Mr. Dubczak said.

But it all depends on whether current market volatility subsides, as large swings in equity prices can disrupt even the best-laid plans.

For instance, BMO advised one client that was intending to go public in 2018 to put those plans on ice until the following year, Mr. Miller said.

Nitin Babbar, head of Canadian equity capital markets at RBC Dominion Securities, called it a “difficult” year for capital raising in Canada, as highly unpredictable markets hurt financing activity in all asset classes.

Energy was hit especially hard, however, as a result of the delays facing the Trans Mountain pipeline expansion and the widening gap between U.S. and Western Canadian oil prices.

“Our hope is that opportunities for both investors and corporate issuers will improve in 2019,” Mr. Babbar said in an e-mail. “All eyes are on alternative forms of transport and the reset of this pipeline project under federal ownership, which is a potential positive for 2019.”

Mr. Dubczak says that much will come down to whether unresolved trade issues – such as the conflict between China and the United States – abate. Politics have begun affecting markets much more than they used to, he said.

“If you go back 10 years, all kinds of stuff happened in the world that the markets yawned at, and now they’re letting it bug them," Mr. Dubczak said. “You tell me what’s happening with the trade issue and I think that will largely drive the sentiment in equity markets."

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