After a challenging year for initial public offerings in 2009, growing investor appetite is set to drive a rebound in IPO activity in Canada, a new report from PricewaterhouseCoopers suggests.

PwC’s Decade in Review of the Canadian IPO Market, released on Tuesday, describes the years from 2000 to 2009 as a “roller coaster ride” for the IPO market. The report provides an overview of the decade, which began with a rise and fall of IPO activity due to the dot.com crash, followed by the income trust-fueled peak of activity mid-decade, and then a fall off of activity during the global credit crisis.

During the decade, IPO activity in Canada generated a total of 759 new issues worth $42.6 billion. The market peaked in 2005 with just under $7 billion in activity.

In 2009, the total dollar value of IPO activity rose to $1.82 billion, up from the decade low of $700 million in 2008. But PwC points out that IPO activity was concentrated in 2009, with four offerings accounting for 96% of the total activity.

Still, PwC notes that the decade ended on a hopeful note, with a return to more sizable offerings on the Toronto Stock Exchange – the average offering was $437 million in 2009, up from $55 million in 2008. This indicates an “increased appetite for new and larger equity issues from investors,” the report says.

It adds that investor confidence is improving, liquidity is improving, valuations are rising and an economic recovery is underway, creating the foundation for the IPO market to begin growing again.

“With these fundamentals falling into place, we believe an annual IPO market of $4 billion is not out the question and not far away,” PwC says.

For the decade as a whole, consumer and industrial products was the leading sector in terms of the amount of equity raised, representing 25% of activity. Close behind was technology and communications, at 20%.

The financial services sector accounted for 14% of IPO activity during the decade. Only 34 financial sector IPOs took place, but the average offering size was larger than most other sectors, at $181 million.

The sector had some of the largest offerings over the 10-year period, including Sun Life Financial Services’ $1.8 billion offering in 2000, ING Canada’s $907 million offering in 2004, and Genworth MI Canada’s $850 million offering in 2009.

IE