Thanks to a strong second quarter, the value of initial public offering activity in the first half of 2010 has already surged higher than the annual total for 2009, a PricewaterhouseCoopers survey of IPO activity on Canadian exchanges has shown.

A total of 16 new issues on all Canadian exchanges during the quarter were worth a total of $2.4 billion, up significantly from the $464.7 million in the first quarter of 2010. The second quarter’s results were far ahead of the seven issues worth $514.6 million in the same period of 2009.

Year to date, IPO activity has generated approximately $2.9 billion from 32 new issues, up from $517.1 million from 10 new issues in the first half of 2009. In 2009 as a whole, IPO activity totalled $1.8 billion, PwC reported.

For 2010, the firm speculates that an IPO market of $4 billion is possible for Canada. But it warns that the recovery in the IPO market will be a bumpy ride. It notes that a number of potential new issues were either delayed or withdrawn in the second quarter.

“The IPO market was off to a great start in the first quarter, but like the rest of the equity markets, IPOs have been sideswiped by a return of volatility in the second quarter,” said Neil Manji, PwC national IPO services leader. “The recent volatility combined with concerns about worldwide economic growth and the decline in equity markets in the last quarter gave new issuers a reason to pause and catch their breath. This kind of bumpy ride is to be expected in the early stages of a recovery, but makes it difficult for both investors and issuers.”

The largest issue was the $1.35 billion placement by Athabasca Oil Sands Corp. at the beginning of the second quarter, the survey showed. Among the other issues that were successfully placed in the quarter were real estate and other businesses with stable cash flows, which indicates that the market is open to investments with more sustainable and predictable returns, according to Manji.

“The activity to date and what we see in the pipeline suggest that the recovery will be more broadly based when some of the current volatility subsides,” he said.

IPO activity on the TSX in the second quarter of 2010 registered eight new issues with a value of approximately $2.3 billion, compared to the single IPO worth $500 million in the same quarter of 2009.

In the first half of the year, a total of 12 new issues appeared on the TSX, compared to just one during the same period of 2009. Total value of new equity issues on Canada’s senior exchange equaled $2.7 billion for the first six months of this year, up from the $500.2 million for the first half of 2009.

IE