TORONTO Oct 6 The value of Canadian equity
issues reached its strongest-ever level in the first nine months
of 2016, driven by large transactions in the energy sector,
according to Thomson Reuters data released on Thursday.
A modest improvement in commodity prices allowed energy and
mining companies to tap equity markets and raise capital during
periods of relative market stability.
The worth of equity issues reached C$38.8 billion ($29.38
billion) this year through September, topping the C$35.7 billon
that was raised last year at that point, numbers from Thomson
Reuters showed. It also surpassed C$35.9 billion of equity
issuance for the same period in 2009, the previous record.
The figures reflect totals for initial public offerings and
Ranked by the value of equity financing deals, the three top
advisers were Toronto Dominion Bank, Royal Bank of
Canada and Bank of Montreal. CIBC Capital
Markets, Bank of Nova Scotia and National Bank
of Canada rounded out the top six.
Natural gas producer Encana Corp's C$1.3 billion
stock issue was the biggest deal of the third quarter. Credit
Suisse and JPMorgan were the advisers.
"This year has been exceptional for equity issuance. We've
seen an unprecedented level of activity in the last eight to
nine months," said Benoit Lauzé, CIBC's head of equity capital
Natural resource companies saw an opportunity in a rebound
in commodity prices to raise equity, and they did it to
strengthen balance sheets and make acquisitions.
"Acquisition-driven financing will continue to be a big
theme," said Derek Neldner, RBC's head of Canadian investment
The volatility in commodity prices and the uncertainty due
to geopolitical shocks such as Brexit dampened the appetite for
IPOs, investment bankers said.
Fashion retailer Aritzia Inc was the only initial
public offering of at least C$5 million to hit the market this
year, Thomson Reuters data shows. CIBC, Merrill Lynch Canada and
TD were the lead advisers on the deal.
"The U.S. IPO market has started to accelerate," Neldner
said, suggesting that the sentiment could spill over into
Canada. "There are more (Canadian) issuers looking at 2017."
($1 = 1.3206 Canadian dollars)
(Reporting by John Tilak Editing by W Simon)