Equity market financing hits five-year high

(February 9, 2004) Stock market financing reached a five-year peak in the fourth quarter of last year with equity issues totalling $14 billion, the IDA says. Rising stock markets, continued economic growth in the U.S., low interest rates and tame inflation were the main reasons for the gains, the brokerage industry association said in its quarterly report on equity financing.

Common shares generated $7.1 billion in the quarter, an 85% jump from 2002. “The resource sector was particularly active, fuelled by continuing strength in the world’s commodities prices,” the report says.

Secondary issues reached $3.9 billion, led by Shoppers Drug Mart’s $924 million offering. Nearly 900 new private placements generated $2.6 billion. Initial public offering activity also showed signs of recovery, the IDA says, totalling $504 million in 33 new issues.

Income trusts continued their torrid pace, worth $5.9 billion in Q4, a 93% gain from the same period last year. The Yellow Pages Income Fund led the way for the second consecutive quarter, raising $1.5 billion.

Canada’s income trust universe was valued at $63.3 billion at the end of 2003, up 44% from the previous year.

Trading volume on the Toronto Stock Exchange hit a record 16.2 billion shares in Q4, 30% higher than last year.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com