Resource deals fuel Canadian equity issues rebound in first half of 2016

Thu Jul 7, 2016 3:43pm EDT
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By John Tilak

TORONTO (Reuters) - Canadian equity issues picked up steam in the first half of the year after a period of sluggish activity as resource companies took advantage of a rebound in commodity prices to tap capital markets, Thomson Reuters data showed on Thursday.

Royal Bank of Canada (RY.TO: Quote) topped the league tables rankings for investment banks shepherding new shares to market, followed by Toronto Dominion Bank (TD.TO: Quote) and CIBC Capital Markets (CM.TO: Quote). Bank of Nova Scotia (BNS.TO: Quote) and Bank of Montreal (BMO.TO: Quote) rounded out the top five.

After a lull in the second half of last year and early 2016, equity offerings began showing signs of renewed life late in the first quarter sustained by further momentum in the second quarter.

Both energy and mining companies took advantage of commodity prices rebounding from multi-year lows.

The price of gold is up nearly 15 percent since the start of the year, and oil prices have gained about 37 percent in the same period.

Equity issues rose to C$28.7 billion ($22.11 billion) in the first half of the year, compared with C$12.47 billion in the second half of 2015. The number was lower than C$30.2 billion in the first half of last year, when equity offerings hit a near-record high, according to numbers from Thomson Reuters.

"We saw very strong global demand from retail and institutional investors. Several offerings were multiple times oversubscribed," said Derek Neldner, RBC's head of Canadian investment banking.

"It's a nice sign of capital returning to Canada," he added. "Canada broadly came back on global screens this year."   Continued...

A Royal Bank of Canada (RBC) sign is seen outside of a branch in Ottawa, Ontario, Canada, May 26, 2016. REUTERS/Chris Wattie