With a quarter of the year still ahead, the value of initial public offerings in Canada in 2010 has crested above $4 billion, but the market has yet to show signs of a solid recovery, data from the PricewaterhouseCoopers survey of IPO activity on Canadian exchanges has shown.

A total of 10 new issues on all Canadian exchanges in the third quarter of 2010 contributed $1.41 billion to a total value of $4.3 billion raised so far this year, the PwC survey reported Tuesday. In the same period of 2009, there were just five new issues on all Canadian exchanges for a total of $952 million. Activity for the full year 2009 was less than $2 billion.

New issues on the TSX dominated third quarter results this year, with three IPOs on the senior exchange accounting for $1.4 billion in new capital during the period. Two of those issues — MEG Energy Corp. at $700 million and SMART Technologies Inc. at $660 million — represented the majority of the new issuances.

“At the beginning of the year, we suggested the market could rebound to over $4 billion based on hopeful signs of renewed investor confidence. We have now exceeded that mark with three months to spare — which is great news — but the recovery has been clearly uneven,” explains Neil Manji, PwC national IPO services leader. “Looking at the deals so far this year, we achieved $4 billion through a handful of large issuances, whereas a prospering IPO market would feature a number of deals in the $200 million — $300 million range. IPOs of that size are still struggling to come to the market, as evidenced in planned IPOs that were cancelled. When we see more of those deals, it will be a clear indicator that medium-size companies can access the market again and investor confidence is back.”

Seven new issues on the TSX Venture exchange generated just less than $15 million during the third quarter of 2010 vs two issues valued at $1.6 million during the same period of 2009, the survey showed. There were 25 issues on the TSXV during the first three quarters of this year, an increase from eight IPOs registered on that exchange during the same period of 2009.

IE