The Canadian initial public offering (IPO) market had a lackluster second quarter in 2016, with only one new issue coming to a Canadian exchange, according to a survey report published by PricewaterhouseCoopers LLP (PwC) on Monday.
A new issue of $550,000 on the Canadian Securities Exchange (CSE) was the only Canadian IPO in the second quarter.
For the first half of 2016, only two new issues on the CSE generated just over $1 million. There were no IPOs on the Toronto Stock Exchange’s (TSX) senior market or the TSX Venture Exchange for the first six months of the year.
This finding contrasts sharply with the first half of 2015, when 13 new issues raised $1.4 billion in new equity on all Canadian exchanges, according to the survey.
The 2016 findings are not the result of a shortage of investors, but a lack of economic certainty, says Dean Braunsteiner, PwC’s national IPO leader.
“Every region, every country is reviewing its economic outlook,” Braunsteiner says in a statement released Monday. “In Canada, there’s concern about the housing market. Until some of those clouds dissipate, we can’t expect too much from the IPO market.”
The continuing global market uncertainty that has resulted from the U.K.’s recent vote to terminate its membership in the European Union has likely also dampened any enthusiasm for IPOs in the near future, Braunsteiner adds.
However, the survey notes, there has been good news for the Canadian economic market, with domestic equities on an upward swing and the market for secondary offerings having gained ground prior to the vote in the U.K.
“The previously moribund mining sector enjoyed notable activity, where companies in mid-stage development have been attracting buyers to secondary issues,” the report states.
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