While the seasonal weakness associated with the month of May (“sell in May and go away”) shouldn’t come as a shock to most investors, this year’s May marks an especially rough year for the TSX Venture. According to the TMX Group’s May 2019 Market Intelligence Group (MiG) report, new listings are down 30% from 81 to 57 year-to-date while total equity capital raised is down 54% from approximately $3.47 billion to $1.59 billion year-to-date.
Unsurprisingly, the total number of financings on the TSX Venture declined 18% from 748 to 613 YTD May 2019 when compared to YTD May 2018. However, while public offerings were down 66% from roughly $1.1 billion to $376.5 million and private placements were down 50% from approximately $2.3 billion to $1.1 billion, IPO equity capital raised soared 72% from $18.3 million to $31.4 million. On a percentage basis, this is the biggest drop in supplementary and private placement financings for YTD May on the TSX Venture in a 5-year timespan.
Another highlight from the TMX Group’s May 2019 Market Intelligence Group report is the fact that the TSX Venture’s Life Sciences sector—despite being only 6% of the TSX Venture’s total listed issuers—now makes up $8.2 billion, or 17%, of the TSX Venture’s total Quoted Market Value (QMV).
For comparison’s sake, the Mining sector makes up 56% of the TSX Venture’s total listed issuers, and is responsible for a mere $17.9 billion, or 37%, of the TSX Venture’s total QMV. The number of new mining issuers has dropped dramatically for YTD May 2019; only 5 Canadian mining companies have listed on the TSX Venture this year while 21 Canadian mining companies and 3 International mining companies had listed on the TSX Venture by May 2018.
Furthermore, while on the topic of International listings, YTD May 2019 marks the lowest number of Asian listings (14% of all TSXV International listings) on the TSX Venture in a 5-year time-span—perhaps a consequence of Canada’s deteriorating relations with China.
May 2019 Market Intelligence Report Shows A Changing TSX Venture
Judging from the data provided in the TMX Group’s May 2019 Market Intelligence Group report, investors appear to have substantially less interest in supplementary and private placement financings YTD May 2019 compared to years prior. Moreover, the data seems to suggest that the market value of the TSXV’s Life Sciences sector could one day rival that of the TSXV’s Mining sector… granted, of course, that the global cannabis industry continues to grow.