The head of Toronto Stock Exchange (TSX) owner TMX Group Ltd. says that conditions are favourable for companies looking to raise public money in Canada, despite low business confidence and economic uncertainty.
“The underlying conditions for companies to raise money right now are excellent, they’re the best they’ve been in years,” John McKenzie, TMX Group’s CEO, told BNN Bloomberg in a Tuesday interview.
“We’ve got strong valuations in the market… that market’s up 20 per cent year over year, you’ve got a lot of capital to deploy, valuations are good, interest rates are coming down, so the conditions to raise capital are excellent, but the confidence is the gap.”
McKenzie said that increasing the number of “good transactions” in the form of initial public offerings (IPOs) on the TSX will help close that confidence gap, pointing to the exchange’s only corporate IPO last year, Groupe Dynamite Inc., as a positive sign.
“Other people can look at that and say, okay that’s something I can build on,” he said, noting that despite how quiet the Canadian IPO market has been in recent years, TMX is working with dozens of companies that are considering going public in the future.
“On the inside, we keep working on a pipeline of issuers that are private today that could raise public money. We’ve got 1,600-plus that we’re talking to, it’s just a question of when for them, so you need to have some positive indicators.”
McKenzie said that with that in mind, the political and economic turbulence that’s gripped markets since U.S. President Donald Trump took office has been particularly frustrating for TMX, as it “just raises another question mark on confidence.”
Trump’s continued threats to place a 25 per cent tariff on Canadian goods entering the U.S. would have potentially devasting impacts for companies in Canada who export their products to the American market.
McKenzie said in times like these, it’s important for Canadian companies and their investors to think about the long-term.
“I always remind people that we’ve actually been around for 173 years, so we’re not working quarter by quarter, we’re trying to focus on how to make this market the most competitive for the long term,” he explained.
“And that’s actually what I worry about a little bit with all the Trump and tariff talk, is that we worry about the symptom and not the long-term problem.”
McKenzie’s comments came a day after TMX posted results from its fourth fiscal quarter of 2024. The numbers showed the company’s revenue increased by 30 per cent to $393 million, well ahead of the $373 million that was expected.
The company also announced that it’s raising its quarterly distribution to shareholders by a penny from 19 cents a share to 20.
With files from Peter Evans
