Flat-lined market for IPOs on TSX shows no sign of revival in first quarter, survey reveals

TORONTO, April 2, 2009 — The market for initial public offerings on Canada's senior stock exchange endured the first quarter of 2009 without a single offering of new corporate equity, a PricewaterhouseCoopers (PwC) survey of IPOs on Canada's equity exchanges has revealed.

It was the third consecutive quarter with no new corporate equity offerings on the TSX.

The market for IPOs didn't have far to fall: Only three new issues made it to the TSX in the first quarter of 2008, for a total value of $113 million. By comparison, in the first quarter of 2007 there were five IPOs with a value of $191 million.

Activity on the TSX Venture exchange was also down, with three IPOs and a total value of $2.5 million during the quarter, off from the 14 issues valued at $30.7 million during the first quarter of 2008. The same number of new issues in 2007 generated $91.2 million in new equity.

The TSX Venture IPOs were the only activity on all Canadian exchanges in the first quarter of 2009, down from a total of 20 issues valued at $148 million in the same period of 2008. In the first quarter of 2007, there were 21 offerings with a value of $300 million.

"It has been hard to find many signs of life in the IPO market in the past two years, so optimism about the second quarter, and even beyond, is in short supply," says Ross Sinclair, national leader for PwC's IPO and income trust services. "But that doesn't mean investors have stopped looking for opportunities in other new listings."

The PwC survey does not include structured financial product listings in its quarterly reviews of equities markets because they do not represent new equity raised for operating companies. However, Sinclair points out that there is still a market for new issues of these structured financial products - investment vehicles created to acquire portfolios of traded shares, bonds or other financial instruments — as an indicator that investors are seeking some new listing investment opportunities in a variety of areas. In the first quarter of 2009, there were eight new structured financial products introduced to the TSX, with a value of $394 million, representing a decline from the same period in 2008 of 25 issues worth $1.2 billion.

"While not depressed to the IPO levels in our survey, it is interesting to note that these structured products have also shown a steady decline," says Sinclair. The total number of structured products in 2008 was 50 valued at $2 billion. In 2007 there were 80 worth $4.3 billion.

For more information, please visit www.pwc.com/ca/iposurveys.

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