There were fewer initial public offerings in Canada last year as income trust launches, a popular investment vehicle that propped up the market recently, lost some steam, according to a survey released recently.
PricewaterhouseCoopers said in its annual survey that the IPO market fell 20 percent last year from the year before.
But there were encouraging signs that investors may be ready to snap up other offerings besides income trusts.
The survey said 56 IPOs worth C$4.6 billion ($3.6 billion) were launched last year, 21 of them income trusts.
That is down from 69 IPOs worth C$5.8 billion in 2002 of which 35 were income trusts.
"It must be recognised that the market's considerable appetite for income trusts in 2002 pushed the total activity and value up dramatically," Eric Slavens, IPO services leader for Pricewaterhouse Coopers, said in a statement.
Wary of weak equity markets, investors had poured money into income trusts, which are usually formed from low-risk assets that pay regular distributions from cash flow and avoid big capital spending projects. The tax burden is somewhat lower than that for regular companies.
But Slavens said there were signs investors may be inclined to make a broader return to the market, citing a C$40 million IPO by Workbrain Corp, the first software offering in the Canadian market in three years.
Meanwhile, GMP Capital Corp, the Canadian brokerage firm formerly known as Griffiths McBurney and Partners, made a well-received C$100.1 million offering in December.
This suggests that more traditional initial public offerings may be making a comeback, Slavens said.