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Japan may serve as an example of what’s to come for countries facing widening recessions. A man looks at an electronic board displaying market indices and graphs outside a brokerage in Tokyo September 20, 2012. The Nikkei average shed 1.6 percent on Thursday, giving up the previous session's sharp gain, as lackluster Chinese manufacturing data reinforced concerns over flagging demand in Japan's largest trading partner. REUTERS/Yuriko Nakao (JAPAN - Tags: BUSINESS EMPLOYMENT)


Talk of a "great rotation" into stocks, a sense of optimism that the path of economic growth doesn't contain any nasty surprises and pent-up demand from investors – put those things together and you have the ingredients for a speedy start to the year for initial public offerings and stock sales.

So far, there have been IPOs worth $10.6-billion (U.S.) in 2013, more than three times the level of activity in the same stretch of 2012, according to figures from Thomson Reuters. Big debuts include Nippon Prologis REIT in Japan, German REIT LEG Immobilien AG and Zoetis Inc. in the United States.

Overall equity offerings are up 75 per cent, the figures show, while overall debt sales are down 12 per cent globally. There's a bit of rotation evident in the numbers.

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If there's a theme in the IPO numbers, it's that real estate is still booming. Property-related IPOs account for fully a third of all IPO activity.

In Canada, the real estate IPO lineup is said to be long, with bankers working on a half dozen or more deals that could come to market if conditions stay ripe.

The caution for investors is watch those structures – REIT structures can be loaded down with ways to siphon off fees from the REIT, for management and for transactions such as mergers and acquisitions. This late in a cycle, with this much optimism, it pays to read the disclosure to ensure that the deals on offer aren't stacked against the investors.

(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)

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