The quarterly survey of Canadian equity markets by PwC revealed only two new issues on the Toronto Stock Exchange (TSX), leaving the Canadian market for initial public offerings (IPOs) stalled in the second quarter of 2012.

The two issues on the TSX in the second quarter, with a total value of $185 million, were both real estate trusts. They were the only IPOs on the TSX in the first half of 2012, the PwC survey showed.

With 12 IPOs registered on the TSX Venture and five on the CNSX, the total number of new equity issues in the second quarter reached 17 with a total value of $199 million.

The 32 new issues on all Canadian exchanges in the first half of 2012 generated $220 million in new equity, a significant drop from the first half of previous year. By comparison, there were 34 IPOs on Canadian exchanges in the first half of 2011 with a value of $1.4 billion.

The European debt crisis, a global softening of commodity prices and the resultant market volatility conspired to keep both issuers and investors on the sidelines, says Dean Braunsteiner, PwC national IPO services leader, while the controversial Facebook IPO in the U.S. failed to ignite interest in the technology sector during the quarter.

“The interest in REITs is testimony to the enduring appeal of the yields from real estate, and the single bright spot in the second quarter,” Braunsteiner observes. “But sagging commodity prices and the recent slide in the price of oil have made it very difficult for companies in those normally active sectors to plan new issues. Caution will be the watchword for the next few months.”

A PwC survey of U.S. equity markets showed a sharp decline in IPO activity at the end of the second quarter. Braunsteiner notes, “While the U.S. market slowed abruptly at the end of the quarter, that hasn’t dimmed optimism there.”

Braunsteiner concludes, “There are still some significant IPOs in the pipeline in the U.S. The challenge for them and for the new issues we see coming in Canada, will be timing.”