Canada’s TMX Group, the holding company for the Toronto Stock Exchange, its venture exchange and the Montreal Exchange, is aiming for more business in China and will soon open an office in Beijing.
In keeping with that plan, TMX has already hired a Mandarin-speaking former Beijing resident who understands the Canadian stock exchange business and will lead the Bourse’s efforts in China.
“We are just waiting for approvals from China before making a formal announcement,’’ said Colleen Chambers, a Vancouver-based TMX Group analyst, who spoke to Stockhouse en route to the San Francisco Hard Assets Conference on November 19.
Canada’s dominant equity bourse is already seeing a lot of interest from Chinese companies.
By the end of October 2010, 54 Chinese companies had chosen to list their securities on the TSX and venture exchange. That includes the eight companies who got listed so far this year.
But by opening what will essentially be a marketing office in Beijing, TMX officials are certain that they can attract more business to Canada, in the form of more listings, more investment and more trading. This is because Canada retains a stable banking sector and its resource-based economy has fared better in recent years than many other countries.
TMX Group officials are confident that Chinese companies will see the potential benefits of being listed on a two-tier market that retains a lot of credibility and a good track record as a listing and trading franchise, especially for companies engaged in natural resources development.
“We just think that this is good business for TMX and good business for Canadian capital markets,’’ a TMX official said.
Canadian Finance Minister Jim Flaherty recently helped to set the stage for the TMX’s Beijing launch by reaching an agreement with the China Banking Regulatory Commission.
It designated Canada as a destination for Chinese banking wealth management business under China’s Qualified Domestic Institutional Investor (QDII) program.
“This agreement will give Canadian financial markets access to up to US$8 billion in investment capital,’’ said Flaherty, who made the designation a key objective of a trip to China in August 2009.
The QDII program allows approved institutional investors in China, including banks, fund management companies and insurance firms, to invest in funds pooled from their mainland clients in approved overseas financial markets.
On November 10, Flaherty said the China Insurance Regulatory Commission has also agreed to designate Canada as a destination for Chinese insurance wealth management business. The agreement gives Canadian financial markets access to a potential pool of about $106 billion in investment capital.
The Houston, Texas office of TMX Group’s Natural Gas Exchange (NGX) is currently the only TMX office located outside of Canada.
Below is a list of Chinese companies who currently trade on either the TSX or TSX Venture Exchange.
Asia Bio-Chem Group Corp. (TSX: T.ABC, Stock Forum), Boyuan Construction Group Inc. (TSX: T.BOY, Stock Forum), China Coal Corp. (TSX: V.CKO, Stock Forum), IEMR Resources Inc. (TSX: V.IRI, Stock Forum), China Health Labs & Diagnostics Ltd. , (TSX: V.CHO, Stock Forum), and Sunshine Agri-Tech Inc. (TSX: V.SAI, Stock Forum), China Keli Electric Company Ltd. (TSX: V.ZKL, Stock Forum).