Canada IPOs plunge in quarter; no summer lift seen

TORONTO (Reuters) - The value of initial public offerings on Canadian stock exchanges fell 16 percent in the second quarter to a record low, and the IPO market appears headed for its worst year this decade, according to a regular survey released on Thursday by PricewaterhouseCoopers.

Eighteen new Canadian issues in the April-June period raised just C$466 million ($457 million), down from 20 IPOs a year earlier that raised C$555 million.

"To put these results in context, the 2007 results were already among the lowest on record," Ross Sinclair, head of PwC's IPO and income trust services, said in a statement.

Half of the new offerings were small ones on the junior TSX Venture Exchange.

On the senior Toronto Stock Exchange, which is owned and operated by TMX Group Inc , just seven new issues came to market in the second quarter with a value of C$434 million, down slightly from C$453 million raised a year earlier.

The bulk of the amount in the latest period came from a C$200-million IPO done by asset management company Sprott Inc .

At its current pace, the Canadian market will struggle to even reach half the IPO value recorded in the slowest period of this decade, which was C$2.07 billion in 2001, Sinclair said.

A variety of factors are behind the current negative environment: stock-market volatility, the U.S. economic slowdown, uncertain credit markets, concern in the financial services sector, the disappearance of Canadian income trusts, and the impact of higher oil prices, PwC noted. There is nothing on the horizon that would indicate a turnaround before the autumn, it said.

"Even the TSX Venture Exchange, which can sometimes show some interesting trends, has little good news," Sinclair said.

In the first half of 2008, a total of C$614 million has been raised in Canadian IPOs, down 28 percent from the same period last year.

($1=$1.02 Canadian)

(Reporting by Lynne Olver; Editing by Peter Galloway)