Toronto Stock Exchange Aims to Compete with Global Rivals for Chinese Listings

The Toronto Stock Exchange plans to enhance its competitiveness in the global market by targeting Chinese companies looking for capital, according to Richard Nesbitt, its chief executive. The exchange will focus on sectors such as energy, mining, and biotechnology, which are already strong areas for the TSX. This move comes as larger US and UK exchanges, including the New York Stock Exchange and the London Stock Exchange, bid for international listings to boost their revenues.

Key Takeaways:

• The TSX aims to attract 18 Chinese companies listed on its platform, surpassing the 17 listings on the NYSE and 10 on the Nasdaq.
• The exchange plans to increase revenues from distributing data and building new markets for structured products, such as exchange-traded funds and income trusts.
• An equity derivatives market is planned for possible launch in March 2009, when a non-compete agreement with the Montreal Exchange ends.
• The TSX Group expects sharp growth in derivatives markets, which are relatively underdeveloped in Canada.
• In the long run, the TSX Group plans to follow the European model of offering trading across multiple asset classes.
• The exchange has acquired NGX, a leading exchange for natural gas and electricity futures, for CAD$38m (USD$31.2m).
• Acquisitions could be part of the TSX's future growth strategy, but Mr. Nesbitt is skeptical of the opportunities available in the US.
• The NYSE's plans and moves will dictate the outlook for the US market and, by extension, the TSX's plans.

Statistics:

• 18 Chinese companies are currently listed on the TSX.
• The TSX has 1,421 listings with a capitalization of CAD$1,546bn.
• The exchange attracts an average of 251.1m shares traded per day.

Sources:

• Richard Nesbitt, chairman and chief executive of the TSX Group.
• The New York Stock Exchange.
• The Nasdaq stock market.
• The London Stock Exchange.
• The Toronto Stock Exchange.
• NGX (Natural Gas Exchange).