Canada’s IPO market was down approximately 20% in 2003 from 2002 as income trusts lost their momentum, according to the annual survey of initial public offerings from PricewaterhouseCoopers.

There were 56 offerings in 2003, worth $4.6 billion. Of these, 21 were income trusts, or about 37.5% of the total. That compares to a total of 69 IPOs in 2002 when 35 income trusts represented 50.7% of activity.

Overall, the 2003 gross value for IPOs, at $4.6 billion, was down from the total value in 2002 of $5.8 billion. In terms of gross value, the market for new income trusts declined as well. Income trusts in 2003, at $3.8 billion, were worth considerably less than the year before, when they amounted to $5 billion.

As the pace and gross value of income trusts declined in 2003, Eric Slavens, IPO Services leader for PricewaterhouseCoopers, notes that some of the initial offerings successfully placed late in the year indicate that investors may be ready to move back towards a broader range of equity offerings. “For example,” he says, “Workbrain Corp., an IPO worth $40 million placed in December, is the first software offering in the Canadian market in three years. Another December IPO, GMP Capital Corp. came to market in the Financial Services sector worth $100.1 million.”

Slavens also notes that the decline in IPOs to 56 in 2003 represents a significant drop from 2002 but, overall, it was not a bad year. “It must be recognized that the market’s considerable appetite for income trusts in 2002 pushed the total activity and value up dramatically.”

The PricewaterhouseCoopers survey tracks IPO activity on the Toronto Stock Exchange (TSX) and the TSX Venture Exchange in nine market categories: Financial Services, Forestry, Life Sciences, Mining, Oil & Gas, Products (including consumer and industrial products), Real Estate, Technology & Media (including telecommunications and entertainment) and Other (including transportation, environment, pipeline and utilities). The firm reports annually on IPO activity in these sectors after the second quarter and at year-end.