Market volatility, rates push down Canadian fund raising

TORONTO (Reuters) - Fund raising in Canadian capital markets plunged in the first half of 2022 as high interest rates and stock market volatility put the brakes on corporate plans to raise money.

Canadian equity and equity-related issuance fell 79% in the first six months from the same period a year earlier, with companies raising C$6.9 billion in equity in the first half of 2022, according to data released by Refinitiv.

Equity raising was "remarkably weak" this quarter with a 80% drop year on year, according to the Refinitiv report.

Last year, companies raised C$52.1 billion in equity. On the debt side, a total of C$96.5 billion was raised in the first half of 2022, led by government issuance worth C$67.0 billion, down 29% from the same period last year.

Corporate debt issuance fell 48% to C$22.7 billion.

Rogers Communications' C$4.2 billion debt issue in March was the largest corporate debt issuance in the first half of the year, followed by TransCanada Pipeline.

Among companies, Bausch & Lomb’s C$914 million equity issuance and Xenon Pharmaceuticals C$359.2 million equity fund raising led the chart for the first half of 2022.

"Deal-making in the short term might be trickier given current market volatilities, but neither companies nor private equity players can or will wait for the bottom to make strategic acquisitions or investments," said Jeffrey Singer, chair of Toronto-based M&A advisory law firm Stikeman Elliott.

Bank of Montreal led the league table in investment banking across Canadian equity, common stocks/trusts and secondary offers, while Morgan Stanley led the table on initial public offerings. Canadian Imperial Bank of Commerce led the retail structural products.

(Reporting by Divya Rajagopal; editing by Deepa Babington)