Posted on Leave a comment

Questrade’s IPO Centre: What you need to know

If you haven’t heard much about IPOs this year, you’re not alone.

Globally, investment bankers have had a lot more time on their hands and deal flow has slowed to its lowest levels in a decade (see data on Global IPO proceeds below, courtesy of Renaissance Capital).

Global IPO Proceeds to June 2016 Source: Renaissance Capital

Just about 6 months ago, however, Questrade waded head first into IPO deal waters by launching a new feature on their website: an IPO Centre. Despite the challenging environment, Questrade’s vision for this area appears to be one of convenience for those investors looking for information about companies raising capital from initial or secondary offerings.

Here are some highlights for DIY investors:

First, it’s free to access, which is always nice for investors looking for interesting investment ideas. Deals are listed in a table format and after a deal link is clicked on, Questrade provides further details and a summary of the product in question, from the deal size to the use of proceeds. While due diligence is naturally required, fundamental investors will appreciate this essential overview format.  Questrade advises clients to read the company issued prospectus, as would any broker.

Second, there’s more than just companies coming to market. Despite the name, IPOs of company stocks aren’t the only types of offers featured.

Questrade’s IPO Centre also highlights fixed income deals, new structured products, and secondaries for equities. In fact, in the 6 months since its launch, Questrade has featured 106 deals (as per the “closed” section of the IPO Centre), and at the time of publication, there are currently two open offers. Interestingly, of the closed offers, the vast majority (about 88%) have been some kind of treasury or structured product offering, validating many observations that the Canadian IPO market for companies coming to market has been virtually non-existent for 2016. It should be noted that Questrade’s IPO centre covers Canadian IPOs only.

Number of closed offerings on Questrade’s IPO centre ytd (Source: Questrade IPO Centre website)

While the branding and layout are cool, this kind of feature is evolutionary rather than revolutionary. US brokerages such as TD Ameritrade, E-Trade Financial and Interactive Brokers provide similar platforms and in Canada, Scotia iTRADE offers a variation on this deal information. In this case, Questrade looking to differentiate itself from its Canadian discount brokerage competitors. In a highly competitive market, every little feature helps.

Despite the rough year in IPOs,  Twilio’s successful IPO in the US earlier this summer and  speculation that Real Matters may seek to go public in Canada this fall suggests that there still might be a headline or two left before the year is out. In the meantime, all that Questrade’s IPO Centre can do is continue to be prepared.

For additional information on Questrade’s IPO Centre, check out this blog post.

 

Leave a Reply