How Canadian chauvinism led to the decline of the TMX – by Terence Corcoran (National Post – (November 27, 2015)

The National Post is Canada’s second largest national paper.

It was the fullest expression of Canadian corporate nationalism. A convergence of the mightiest financial poobahs in the country: bank executives, public pension managers, regulators, politicians — all out to protect the vital organs of Canadian capitalism, the nation’s stock exchanges, from the foul clutches of a foreign company.

“We must ensure,” said Jim Prentice, then vice-chair of Canadian Imperial Bank of Commerce, “that the so-called ‘mind and management’ of Canadian finance do not migrate to London, or for that matter to New York or Hong Kong.”

That was in March 2011. More than four years have passed since Prentice, along with TD Bank CEO Ed Clark and others, joined forces to thwart a proposed merger of the TMX with the London Stock Exchange.

Since then, however, the mind and management of the owners of the TMX (which had earlier consolidated the Toronto, Montreal, Calgary and Vancouver stock markets) have achieved little if anything in terms of building the value of the TMX. In the meantime, major global stock market operators — including the one that once sought to run the TMX — have soared.

Since 2012, when four big Canadian banks and four government-backed pension giants acquired TMX, as the Maple Group Acquisition Corp., through a kind of internal coup d’état, the stock exchange company seems to have stalled out.

TMX shares, bought at $50 each by the bank/pension consortium, are now languishing below that, around $46. The company’s market capitalization, measured in U.S. dollars, has declined from US$2.8-billion to US$1.9-billion.

Shares in the London exchange, which saw the TMX merger as an opportunity to help make Toronto part of an international powerhouse, have rocketed since the TMX deal collapsed.

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