According to our new survey, the Canadian market for initial public offerings ground to a virtual halt in the first quarter of the year. Save for a single issue of less than $600,000 on the CSE, the first quarter was a washout for investors seeking new opportunities and represented the smallest quarterly IPO market in more than a decade. It is the first time in recent memory that Canadian markets saw less than $1 million in new issues.

The dismal first quarter is in keeping with past years, notes Dean Braunsteiner, national IPO leader at PwC Canada, and not necessarily a cause for alarm.

“In recent years, we’ve seen a pattern of very slow first quarters,” he explains, “but that’s not necessarily indicative of the year ahead. And in this case, it belies a vibrant market for secondary issues that has grown despite the turmoil in other areas of the market.”

Since 2008, there have been three years – 2009, 2012 and 2014 – with no first quarter activity on Canada’s senior exchange and one year when just a single new issue made it to the TSX in the first quarter.

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The first quarter of 2014 laid claim to being the worst quarterly result in a decade with no IPO activity on the TSX and a meager $2.3 million from all exchanges. The first quarter of 2009 wasn’t much better ($2.5 million in proceeds from three issues on the TSX Venture and no new issues on the TSX). Despite poor starts, most years recovered to respectable levels by year-end.

Braunsteiner points to the vibrant market for secondary equity offerings and a buoyant debt market as a measure of investor appetite for new opportunities. “Investors have looked to mature companies and well-known names for investments and have found a surprising menu of options,” he says. Of particular note was the level of secondary market activity coming from the oil & gas sector, and a spate of preferred share offerings from Canada’s banks.

Follow-on issues, led by well-known names such as Enbridge Inc., Fairfax Financial Holdings Ltd. and Kinross Gold Corp., accounted for more than $8.1 billion of activity in the first quarter of 2016.

Braunsteiner lists the usual suspects as the cause of the first quarter stumble in the IPO activity: Extreme market volatility, a poor outlook for commodities, oil’s continued downward spiral and global security concerns. The silver lining, he says, is in the strength of the U.S. economy and the advantage of the lower Canadian dollar for manufacturers that make this as a good time to go public.