Companies raised a total of $132.29 billion in capital in B.C. last year – a 17-per-cent decrease from 2021 and the first decline after five years of consecutive growth, according to the BC Capital Market Report 2022 released by the B.C. Securities Committee (BCSC) this month.
The figure includes capital raised by companies and investment funds, by both private placement and prospectus.
In 2022, 2,866 companies raised capital in the province, a 28-per-cent decrease over 2021. Of these companies, 51 per cent were based in B.C.
B.C. companies and investment funds raised more than $26.36 billion last year, a 39-per-cent decrease from 2021. This activity accounted for 20 per cent of capital market activity in the province in 2022.
“B.C.’s investment markets are cyclical in nature,” said John Hinze, corporate finance director of the BCSC, in a press release.
“The global markets in 2022 showed volatility, due in part to the pandemic, supply-chain issues, inflation, and interest rate hikes. These factors led to a global equity market downturn which, in turn, affected B.C.’s capital market.”
Most sectors and sub-sectors tracked by the BCSC saw declines in capital-raising activity in 2022, with the exception of banking and finance, for which activity increased by eight per cent year over year.
For B.C. companies, mining remains the most-active sector, even though capital raised experienced a significant year-over-year decline. The sector raised $5.79 billion in capital in 2022, a 43-per-cent decrease from a record year in 2021. A total of 716 B.C. mining companies raised capital, accounting for nearly half of the total number of B.C. companies that raised capital last year.
Real estate is the second most-active capital-raising sector for B.C. companies in 2022: $4.45 billion was raised, a 10-per-cent decline from the previous year. The 10 largest B.C. real estate companies – by capital raised – attracted more than half of the total capital raised by the sector.
B.C companies saw a drop in capital raised in other sectors and, compared to 2021, raised 65 per cent less in banking and finance, 59 per cent less in cannabis, 53 per cent less in technology and communication and 42 per cent less in biotechnology.
Despite the declines, BCSC’s report noted that 2022 was B.C.’s third most-active year for capital raising.