Last year was a leaner one for Canada’s investment banks as both debt and equity market issuance in the Canadian market declined, says a report from Thomson Reuters.
Equity issuance dropped in 2018, led by a decline in secondary-market offering activity. Although debt markets held up a bit better, issuance still declined year over year, the report says.
For the full year, Canadian equity and equity-related issuance totalled $29.3 billion, down by 26.2% from 2017, while the number of deals declined by just 11.1% to 329 in 2018. In the fourth quarter (Q4), the number of deals actually rose by 14.3% compared with the third quarter (Q3), and deal proceeds ticked up slightly as well, the report notes.
By sector, healthcare led the equity market in underwriting activity in 2018, raising $5.5 billion. The materials sector ranked second, followed by financials and real estate.
According to Thomson Reuters, TD Securities Inc. (TDSI) ranked as the top equity underwriter for 2018, leading the way in overall Canadian equity issuance, common stock issuance, secondary offerings and preferred securities. BMO Capital Markets placed first in initial public offering underwriting, the firm reports, with CIBC World Markets Inc. leading the way in retail structured products.
On the debt side, RBC Capital Markets ranked as the top underwriter overall, leading the way in Canadian debt underwriting rankings, domestic corporate debt and cross-border underwriting. National Bank Financial Ltd. ranked first in the Canadian government debt rankings, the firm says, with TDSI leading the way in corporate maple debt.
Overall, Canadian debt issuance for the year totalled $165.6 billion, which was down by 10.7% from the previous year. In Q4, debt underwriting proceeds fell by 12.8% from Q3, and the number of deals declined by 13.3%, Thomson Reuters says.
Government and agency debt continues to account for 52% of total debt underwriting activity, followed by financial services at 32% and the energy industry a distant third (5%).