The Canadian IPO market saw a “stable” start to 2019 and the lack of volatility in the first quarter could lead to more Canadian issues this year, according to PricewaterhouseCoopers LLP.
The $240 million IPO of Lightspeed POS Inc. was the largest of eight issues on all Canadian exchanges in the first quarter, which totalled a “modest” $327 million, PwC said in a news release.
The lack of volatility in the first quarter (especially compared to Q1 2018) is a positive for issuers looking for stable market conditions, said Dean Braunsteiner, PwC national IPO leader, in a statement.
“Concerns [from late 2018] over interest rates have subsided, the global trade friction seems to have abated, Brexit has been priced-in and we’re not close enough to the U.S. election for that to be a factor yet. It’s something of a ‘Goldilocks’ moment for issuers,” Braunsteiner said.
The private equity owners of several tech companies are expected to exit their positions, Braunsteiner said, which could push those companies to the IPO route. Lightspeed was the first issue among several tech companies expected to enter public markets.
Additionally, cannabis is cooling, which “should leave a healthy level of capital that had been focused on cannabis looking for other opportunities,” Braunsteiner said.