The Toronto Stock Exchange had just two new IPOs for the second quarter of 2012, both of which were real estate trusts. There were just 32 new issues on all Canadian exchanges in the first half of 2012. These issues generated $220 million in new equity, a significant drop from the first half of previous year. The first half of 2011 showed 34 IPOs on Canadian exchanges in the first half of 2011 with a value of $1.4 billion.
However, the fact is that REITs continue to perform well, says Dean Braunsteiner, PwC national IPO services leader.
"The interest in REITs is testimony to the enduring appeal of the yields from real estate, and the single bright spot in the second quarter," Braunsteiner observes.
The European debt crisis, a global softening of commodity prices and the resultant market volatility conspired to keep both issuers and investors on the sidelines, he says, while the controversial Facebook IPO in the U.S. failed to ignite interest in the technology sector during the quarter.
"Sagging commodity prices and the recent slide in the price of oil have made it very difficult for companies in those normally active sectors to plan new issues. Caution will be the watchword for the next few months," Braunsteiner says. "There are still some significant IPOs in the pipeline in the U.S. The challenge for them and for the new issues we see coming in Canada, will be timing."
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