Equity market ended 2004 with a bang

(February 7, 2005) The Canadian market witnessed a boom in new equity issues in the fourth quarter of 2004, setting a new record of $16.1 billion in new financings, according to the IDA’s Review of Equity New Issues and Trading. Overall, financings were up 12% from 2003, amounting to $48.7 billion for the year.

Common share issuance rebounded in the final three months, raking in $9.2 billion, thanks in large part to offerings from ING Canada and TELUS Corporation. On a year-over-year basis, common equity financings were up 41%, reaching a record-high of $26.4 billion.

Income trust issuance jumped 128% from the previous quarter, to a value of $6.02 billion. Trust issuance for the year lagged 2003 by just 2%.

The massive $2.2 billion secondary offering from TELUS and the $907 million IPO of ING helped provide some sectoral balance to a market that had, up to this point, been dominated by the resource sector. While resources remain strong, new equity issuance has pulled back somewhat, possibly indicating the sector has peaked.

Fourth quarter IPO activity totalled $1.7 billion, up 462% from the third quarter, fueled by the ING offering, the largest Canadian IPO since 2000.

Away from the public markets, private placements also saw an increase in the final quarter of the year. For 2004, there was a 69% increase in total value to $2.2 billion with a 27% boost in the number of deals, at 556.

Record financings were reflected in the performance of the overall market, as both the value and volume of shares traded on the Toronto Stock Exchange were up from 2003. The Composite Index turned in another solid performance as well, gaining 12.5% for the year. Again, the fourth quarter offered a bang, with trading volumes rising 22% from the third quarter to 15.4 billion shares.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com