The head of Canaccord Genuity Group says increased activity in capital markets bodes well for the firm going forward and could signal a resurgence of initial public offerings (IPOs) in the months ahead.
“Certainly, the environment has changed,” Dan Daviau, chairman & CEO of Vancouver-based Canaccord, told BNN Bloomberg in an interview Wednesday morning.
“Things are definitely picking up and getting more active, we’ll see how they play out into September. The markets have been strong… we’ve seen a pretty good recovery out here and that’s bolstering a lot of confidence for CEOs.”
Stock markets in Canada and the U.S. have hit record highs this year despite the uncertainty caused by U.S. President Donald Trump’s ever-changing trade policies and their global ramifications.
Daviau hinted that he is optimistic about increased IPO activity in equity markets including those in Canada but argued that it will be the last step in the ongoing market recovery.
“You see a broader market recovery, then you see a small cap recovery, and then you see an IPO recovery, that’s generally the trend that you see,” he said.
“So, we’ve seen a large cap market recovery, we’ve seen small caps getting better. The next thing I would expect is an IPO recovery; those are more liquid, and they take more time. But I’m confident… a lot of people are going to test the market I think in the next three or four months.”
Daviau’s comments came a week after Canaccord reported first quarter results, which showed a 4.5 per cent year-over-year revenue increase, driven largely by record revenue from the firm’s wealth management unit.
“We’re up to $125 billion in assets globally, that’s a record for us. We had record revenues in the U.K., we had record revenues in our Australia business, and our Canadian business had a fantastic quarter,” he said.
“In Canada we continue to attract some of the best teams from some of the bank-owned platforms and some of the other independent platforms. Our assets in Canada are $45 billion now… and there’s an immense amount of growth still left in the Canadian wealth business.”
Canaccord’s wealth unit also provides a level of stability that allows for predictable quarter-to-quarter growth, Daviau added.
“It’s a relatively stable business; I can tell you what our wealth revenue’s going to be next quarter and not get it that wrong,” he said.
“Capital markets of course is more volatile and depends on the Trump tweet of the day.”
