While discussions on the proposed merger of the Toronto Stock Exchange with the London Stock Exchange continue, perhaps it is time to simply note the accomplishments of the TSX and its role as the leader in global mining sector capital markets. Economic and political merits and demerits of the planned transaction will be discussed in many quarters. Without weighing in on either side of the issue, let’s take a closer look at the TSX.
Today, the TSX and its venture exchange combine forces to be world leaders in mine financing. In the period from 1999 to 2009, the TSX and venture exchange (TSX-V) handled 80% of mine financings in the world and 36% of total equity capital raised globally in the mining sector. In 2009 alone, they accounted for 84% of world mine financings and 34% of total equity raised.
According to materials from the TSX website, as of December 31, 2010, 1,531 mining companies are listed in Toronto – more than any other stock exchange. In 2010, there were more new mining listings – 208 – in Toronto that on any other exchange. More than 200 industry market analysts cover TSX mining companies.
“The TSX (and its related venture exchange) are the only truly diversified mining exchanges supporting the industry from grass roots explorers to developers to some of the world’s largest companies,” said the exchange. Many mining companies have graduated from mineral explorer to mineral producer through the financial farm system advancing from the TSX-V to TSX.
The reach of the TSX and venture exchange is truly global. From the roster of mining companies listed on the TSX and the TSX-V, 82 have operations in Australasia, 105 in Asia, 168 in Africa, 33 in Russia, 198 in Mexico, 256 in South America, 52 in the Caribbean and Central America, 331 in the United States and 934 in Canada.
The exchange for trading of equities in Canada goes back to the formation of the Association of Brokers in 1852, which led to the founding of the Toronto Stock Exchange in 1861. In 1878, the TSE became officially incorporated through provincial legislation.
In 1934, the Toronto Stock Exchange, which was then viewed by many as the junior partner, merged with its key competitor the Standard Stock and Mining Exchange to form a more modern version of the TSE. Around 2000, there was a realignment of stock exchanges in Canada.
The TSE became the sole venue in the country for trading senior equities and the Montreal Exchange became responsible for trading derivatives. The Vancouver and Alberta Stock Exchanges merged to form the Canadian Ventures Exchange, which in 2002 became the TSX-V.
The TSX and TSX-V are key players in Canada’s financial system and major employers in Toronto. Many eyes will be turned to the proposed $6.9 billion deal to merge the TSX with its London counterpart.