Sunday, October 21, 2007

RBC Leads Equity Underwriting in 2007

Globe and Mail, Boyd Erman, 21 October 2007

A shift in focus to smaller deals during the tumultuous third quarter helped the country's biggest investment bank, RBC Dominion Securities Inc., climb to the top of the rankings for leading stock sales so far this year.

RBC, after running 12 sales in the quarter, has led 40 deals this year in which companies sold $3.66-billion of stock to investors.

BMO Nesbitt Burns Inc. moved into second place with $3.37-billion sold in 31 deals, while independent shop Canaccord Capital Inc. showed its success early in the year is no fluke, claiming third spot by raising $3.31-billion in a whopping 80 deals. That's almost twice Canaccord's nearest competitor's total for transactions.

TD Securities Inc., which was the leader through the first two quarters, dropped to fourth spot.

After the mega-sales for stolid utility companies that characterized the early part of the year, the third quarter was all about leading deals for smaller, riskier plays in sectors such as resources, technology and real estate.

RBC, long known as a shop with its sights on big game, has capitalized by also winning smaller mandates. The firm didn't lead any of the five biggest deals in the quarter, which stretches from July 1 to Sept. 30.

“We're looking to identify and build relationships with attractive smaller-capitalization companies that are good candidates for growth,” said Kirby Gavelin, head of RBC's equity capital markets division.

So far, the final quarter of the year has started strong after the relatively quiet summer, a traditionally muted time of year when financings were even more scarce because of the turmoil in markets.

The focus on smaller, risky plays may continue into the fourth quarter, with cash still plentiful and investors looking for ways to bet on big themes that are driving markets, said Matt Gaasenbeek, head of North American capital markets at the firm.

“What we're trying to do is pick a few very large macro themes,” Mr. Gaasenbeek said. “One is the basic materials trade, and as part of that there's also the sustainability side as resources become scarcer. Another we are really focused on is the aging demographic, which plays into things like medical technology.”

TD Bank Leads Equity Underwriting in the 1st Half of 2007