Worst-ever year for IPOs in Canadian markets

January 7th, 2009 - 2:00 pm ICT by IANS  

Toronto, Jan 7 (IANS) With the global meltdown gripping developed and developing economies, 2008 proved to be the worst year for initial public offerings (IPOs) in Canadian markets, says a PricewaterhouseCoopers (PwC) survey.In fact, there was not a single IPO on the Toronto Stock Exchange (TSX) - the third largest in North America and the world leader in energy company listings - in the last six month of the year, the annual report said Tuesday.

The survey said 57 new issues “struggled to reach equity markets in 2008”, with a mere 10 registered on the TSX in the first half of the year. The second half of the year drew blank, compared to 100 IPOs reaching Canadian markets in 2007. The TSX alone had reported 36 new issues in 2007.

The survey said the value of all issues on Canadian markets in 2008 was just $682 million, down 80 percent from the $3.4 billion in 2007.

As for the TSX, the value of all issues in 2008 was just $547 million, down from $3.0 billion in 2007.

“It’s hard to find much to be optimistic about in this data but it is small comfort to know that it isn’t just the Canadian IPO market, or even Canadian equity markets that are struggling,” a PricewaterhouseCoopers release quoted Ross Sinclair, its leader for IPO and income trust services, as saying.

Sinclair said: “I’m afraid we are in uncharted territory, and it is hard to predict when our IPO market will come back and what a new normal level of activity will be.”

He said the first half of 2009 held out little hope for new IPOs as recession, market volatility, poor credit supply and falling commodity prices conspire against a market recovery in the short term.

“We know that there will be pent-up demand for capital and new equity issues when we gain some stability. We just cannot say when that will be,” said Sinclair.

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