The Investment Dealers Association of Canada is reporting a measurable pickup in activity in debt markets in the second quarter, reflecting increased corporate issuance and more active trading in government securities.

In its Review of Debt New Issues and Trading, Q2 2003. the IDA notes that Government of Canada gross bond issuance totalled $14.4 billion in 31 new issues, 3% lower in value compared to the same quarter last year.

Trading in federal bonds totalled $1.17 trillion, reflecting an increase of 24% on a yearly basis. Real return bond trading was $5 billion, doubling in value from the same period last year.

Provincial gross bond issuance totalled $6 billion in 41 new issues, a drop of 12% in value compared to Q2 2002. Trading of provincial bonds totalled $89.5 billion, increasing 9% over Q2 2002.

Corporate debt issuance was $14.5 billion, an increase of 80% over the same quarter a year ago. The most significant corporate issuers included GE Capital Canada Funding Co. raising $1.35 billion and Toronto Dominion Bank offering a total of $0.9 billion.

The financial and real estate sector was the most active sector, accounting for 61% of the total corporate issuance. Corporate debt trading totalled $36.4 billion, up 28% compared to the same quarter last year.

Trading in money market instruments was down by 7%, totaling $1.1 billion in the quarter. T-bill trading improved while trading of Bankers’ Acceptances and commercial paper was down 17% and 7% respectively compared to the same quarter a year earlier.

The report is electronically available on the IDA web site at: http://www.ida.ca/IndIssues/PubResearch/DebtRev_en.asp