Referenced Stocks

Market Chatter: Yield Fuels Canadian IPO Surge That Defies Global Slump

By Midnight Trader,  October 02, 2012, 09:29:41 AM EDT

Regal Lifestyle Communities Inc. and Ivanplats Ltd. are among companies driving what's expected to be the biggest month for Canadian initial public offerings in almost two years, Bloomberg reported.

Companies plan to raise at least C$725 million (US$738 million) through IPOs in October, which would be the highest monthly tally since November 2010, according to data compiled by Bloomberg.

It said real-estate investment trusts and income trusts offering high dividends are driving Canada's new issuance market, bucking a global IPO market slump that's expected to extend into 2013 amid signs of slowing global growth.

"The overriding theme is the demand for yield, which continues," said Sante Corona, head of equity capital markets at Toronto-based TD Securities, a unit of Toronto-Dominion Bank. ( TD ) "There are REITs, energy trusts and mining companies coming to market - it's a confluence of circumstances that they will be in the market together in October."

The biggest Canadian-listed IPOs this year have been dividend payers such as Argent Energy Trust (AET-UN.TO)), HealthLease Properties Real Estate Investment Trust, and Dundee Industrial REIT, which is expected to start trading this week after raising C$155 million on Sept. 26. That trend continues through October, as Canadian investment banks bring more IPOs to the market to meet demand.

"Say what you will about investment bankers, but if people want to buy boots they're not going to sell them shoes," said Les Stelmach, who helps manage C$900 million of high dividend securities for Bissett Investment Management in Calgary.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

Referenced Stocks: TD



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