An improved Canadian appetite for initial public offerings (IPOs) in 2009 is a positive sign for a surge in IPO activity in 2010, according to a PricewaterhouseCoopers study.
In 2009, only 28 new companies listed on Canada's stock exchanges, down from 57 in 2008. However, the total value of IPO activity rose 164% to $1.8 billon from $682 million in 2008.
About $1.75 billion was raised from four new listings, including an $850 million IPO of Genworth MI Canada Inc., a $500 million IPO of Capital Power Corp., Dollarama's $300 million IPO and a $100 million IPO of Vancouver's Magma Energy Corp.
The largest IPO in 2008 was the $200 million offering of Sprott Inc., followed by the $100 million IPO of Vancouver's Seacliff Construction Corp.
The larger offerings last year suggests investor appetite is growing for new public companies, the study said.
Companies that appeared relatively low risk to investors were the first to go to market last year and similar companies will be able to capitalize the market in 2010, said Ross Sinclair, PWC's national leader of income trust and IPO services.
"With the fundamentals falling into place, an annual IPO market of $4 billion is not out of the question."