Despite the market’s free-fall in the second half of May and through June, almost $4 billion in initial public offerings made it to Canada’s equity markets in the first half of 2006, including $2.2 billion in new income trusts, according to the PricewaterhouseCoopers (PwC) six-month survey of Canadian IPO capital markets.

Perhaps surprisingly, the total IPO market, as measured by IPO activity on the TSX, grew by nearly 50% in the first half of 2006 versus the same period of 2005, while income trusts grew by more than 22% during the period.

The buoyant market in the first half of 2006 for income trusts alone approached the value of the total IPO market seen in the first half of 2005, when $2.6 billion in total issues were successfully placed. In the first half of 2005, the total value of new income trusts was $1.8 billion.

The value of new income trusts was almost equally split between the first and second quarters of 2006, momentum that Ross Sinclair, national leader for PwC’s IPO and income trust services, suggests will put the full year’s results for 2006 at least on par with 2005. “Improved market conditions, particularly in the income trust and resource sectors, could push the IPO market to new records,” Sinclair said, in a news release.

“The continued popularity of income trusts not only confirms the important role these vehicles play in the capital markets, it suggests the IPO market for income trusts may be even more stable than the traditional equity market,” added Sinclair.

Interestingly, Canadian technology and media companies are now beginning to access the U.K.’s Alternate Investment Market (AIM) as either an alternative to the TSX and Nasdaq or a joint listing with the TSX. “The AIM market is being considered because of reduced regulatory requirements and strong valuations,” noted Ben Kaak, national technology practice leader for PwC in Canada.

“While the values are small at this stage, it is a trend to watch,” said Sinclair.

There were 36 IPOs on the TSX during the first half of 2006, slightly ahead of the 34 issues during the same period of last year. New income trusts totalled 18 during the period (versus 20 in 2005).

The Addax Petroleum Corp. IPO dominated the list of new corporate issues in the first half at $409.5 million, followed by Gluskin Sheff + Associates Inc. ($133 million) and Corel Corporation ($120.8 million).

The largest new income trust in the first six months of 2006 was the $700 million issue of Teranet Income Fund, followed by Jazz Air Income Fund ($235 million) and Resolve Business Outsourcing Income Fund ($225 million).