Canada’s IPO market tops $2B in 2018

The Canadian market for initial public offerings (IPOs) reached $2.2 billion last year, finds a PwC Canada survey.

While that figure is less than half of the 2017 total, it represents a respectable finish for a market plagued with volatility.

“Unlike 2017 that was skewed by the single giant Kinder Morgan Canada offering, 2018 was reflective of a more normal market in Canada,” says Dean Braunsteiner, national IPO leader at PwC Canada, in a release.

In 2018, 54 new equity issues on four exchanges generated $2.2 billion, compared with $5.1 billion raised from 37 IPOs in 2017.

The top 10 new issues in 2018 were $100 million or more, the survey says. The largest IPO was the $462-million Ceridian HCM Holding issue of the second quarter.

Second and third places were held by MAV Beauty Brands ($241 million) and AltaGas ($239 million), making the top three issues from three different sectors, which is “a testament to the diversity of the Canadian market,” says Braunsteiner in the release.

Exchange activity

The TSX saw 11 IPOs for the year, worth $1.8 billion, while the Canadian Securities Exchange (CSE) saw 28 IPOs, including a significant number of mining issues. The surge of CSE activity was a notable development in 2018, says Braunsteiner in the release, as was a return of junior miners to the equity markets.

“The cost-efficient route to public ownership via the CSE certainly appealed to junior miners and other start-up companies that were focused on maximizing the new equity coming their way,” he says in the release.

More than $491 million was raised for cannabis companies on various exchanges in 2018.

Outlook for 2019

In the new year, one uncertainty will be the number of cannabis industry issues before that market segment begins to consolidate.

Overall, the outlook for IPOs in 2019 is unclear.

For example, uncertainty about interest rates, the continuing Brexit saga and global trade tensions—factors that disrupted markets at the end of 2018—make valuing new issues and bringing them to market difficult, says Braunsteiner in the release.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.