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“So those companies, for sure, there’s a sense of urgency,” Miller said. “Not only that the market is open, valuations are attractive, but everybody gets a sense that there’s potential congestion and wishes to get out ahead of that.”
And while big companies may have helped lead the recovery, the market for small and medium-sized company IPOs is “quite robust,” RBC’s Gardner said. Market interest is broadening to include sectors other than tech and health care, he added.
There is still plenty of activity expected on the debt side as well, according to National Bank’s St. John.
Canadian banks have begun issuing what is known as a “limited recourse capital note,” a tax-friendly offering that is also treated like equity for regulatory purposes. St. John said there is a “significant amount” of LRCN issuance poised to happen.
In-person still has tremendous value. But it doesn’t always need to be that way
Trevor Gardner
More green-bond sales are expected as well, with environmental, social and governance factors becoming more prized by investors. However, St. John said the energy sector has also seen a recent pick-up in activity, as oil prices have edged higher following a collapse in the spring.
Cash-heavy institutional investors may still be looking for somewhere to go, and the pandemic has created a legion of day traders who have become a force unto themselves in the market. Punters are still buying what Bay Street is selling — and that may continue for the foreseeable future, whatever that may look like for dealmakers.
For some, it could mean some pandemic-era practices stick around. When it came to marketing IPOs in the past, there were “long, torturous for some, enjoyable for others, road shows,” RBC’s Gardner said. And yet, in 2020, Bay Street managed to handle a record amount of financing virtually.
“I think what this environment has caused us to realize is, in-person still has tremendous value,” Gardner said. “But it doesn’t always need to be that way.”
Financial Post
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