Companies in Quebec continued raising more money in the exempt market than in public markets last year, according to the Autorité des marchés financiers (AMF).
In a report detailing the work of its corporate finance branch in the past year, the AMF said prospectus-based financings by companies in Quebec dropped by 32% last year. This came amid an 8% drop in prospectus filings across Canada.
The value of equity capital raised in the public markets by Quebec-based companies dropped even more sharply to $400 million from the $1.6 billion raised in 2022.
“This decline is in line with the downward trend for public distributions by … companies in the rest of Canada,” the report said. Total proceeds dropped by 19% in the rest of Canada to $12.7 billion in 2023 from $15.6 billion in 2022.
The report noted only two initial public offerings were filed by TSX and TSX Venture-listed companies in 2023, down from 19 in 2022.
As a result, total IPO proceeds fell 88% to approximately $150 million in 2023 from $1.3 billion in 2022.
“In Quebec, as in the rest of Canada and the United States, despite a strong performance by the stock markets, the pace of prospectus financings continued to slow in 2023,” said Hugo Lacroix, superintendent, securities markets, at the AMF, in a release.
“Inflationary pressures, sustained interest rate hikes, the global financial climate, and various armed conflicts and geopolitical tensions around the world combined to create a more uncertain economic environment for companies and capital markets in Quebec and abroad,” the report said.
Despite the macro challenges, Quebec-based companies increased the amounts raised on the exempt market by more than 27%, the AMF noted.
Quebec companies raised $11.2 billion in the exempt market last year, up from $8.9 billion in 2022, it reported.
The rise in exempt financing came as the number of companies finding financing in the private market rose by 15% year over year, and the number of exempt distribution reports rose 31%.