Underwriting surges in third quarter

(November 7, 2003) The third quarter of this year was the strongest for equity markets financings in the past four years, according to the IDA’s Review of Equity New Issues and Trading.

Underwriting surged 35% from the second quarter, reaching a value of $12.7 billion. The resource sector continued to dominate common equity financing, making up 54% of the $5.3 billion total.

Income trusts remained the strongest sector for initial public offerings (IPOs), making up 93% of all IPOs in the third quarter. Financing of trusts exploded, increasing by 122% over the same period a year ago, hitting $5.3 billion for the 42 new issues. Limited partnerships, which are often broken out from trust statistics, were valued at $445 million.

The IPO of the Yellow Pages trust alone accounted for $935 million of this total, making it the second-largest income trust IPO ever. The income trust universe reached a value of $56.6 billion by the end of the third quarter, a gain of 28.7% since the end of 2002.

Trading activity on the TSX also hit four-year highs, with volume total reaching 14.1 billion shares in the quarter.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca

(11/07/03)