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Canada’s initial public offering (IPO) market took a pause in the first quarter (Q1) of 2018 but that’s not expected to last, says PricewaterhouseCoopers LLP (PwC) in a new report.

The outlook for Canada’s IPO market looks relatively robust, but in the first quarter, the deal activity was weak, says PwC.

There were just nine deals in Q1 2018, which raised a mere $157 million. In Q1 2017, IPOs raised $571 million.

This year, however, market activity pulled back, “as issuers and investors assessed the implications of interest rate hikes, recent U.S. tax changes, market volatility and threats to world trade,” the report says.

Almost all of the IPO value came in a single deal on the Toronto Stock Exchange (TSX) that raised $150 million. The other $7 million was the result of three small deals on the CSE and five transactions on the TSX Venture Exchange.

“A slow first quarter is really pretty normal,” says Dean Braunsteiner, national IPO leader at PwC, in a statement. “With the rush of activity at the end of last year, it isn’t surprising to see the market taking stock — particularly in light of the extreme volatility we saw in the quarter.”

That said, new issues in the pipeline signal a likely increase in deal activity for the balance of the year. “There are some interesting issues in the wings,” Braunsteiner says.

However, the IPO market will have to look past the various sources of short-term disruption, PwC suggests.

Additionally, a number of firms have recently used reverse take-overs (RTOs) as a route to going public, Braunsteiner says, and these deals don’t count as IPOs in PwC’s research.

“Some companies perceive RTOs as an easier, less expensive route to going public,” says Braunsteiner. “That’s debatable. But while it isn’t a significant number overall, reverse take-overs represent a channel that bears watching, particularly as new entrants in the busy cannabis sector jockey for a place in public markets.”