MONTREAL — The TMX Group is playing to its strength as a resource-based exchange to attract Chinese investment and to keep boosting its Chinese stock listings.
With the economy recovering and the Canadian dollar hovering around parity with the U.S. dollar, the time is right to go after Chinese investors, said Robert Fotheringham, senior vice-president of trading for the TMX Group.
“The angle we have approached this from is talking about the resource-rich nature of our offerings, talking about the fact that Canada is the world’s resource exchange,” Fotheringham said in an interview.
The TMX Group was recently in Beijing and Shanghai to meet with traders, government regulators and representatives from banks, investment firms and insurance companies.
“Given that we’ve had the great success of attracting Chinese companies to come and list on the exchange, the next natural step is to attract Chinese money into the Canadian marketplace,” he said.
The TMX has 53 companies from China listed, the second largest source of international listings on the Toronto Stock Exchange and TSX Venture after those from the United States, which has 148 companies listed.
“We’d certainly like to see the Chinese investors come in and investigate our entire market and be free to possibly pick the Chinese companies that are here, but also look at our full suite of companies and products and have them invest in these.”
The total market capitalization of the Chinese listings was $8.6 billion last year.
Forest products company Sino-Forest (TSX:TRE), one of its first Chinese listings in Toronto in 1995, had a market capitalization of more than $5 billion on Monday.
SilverCorp Metals Inc. (TSX:SVM) was worth $1.24 billion, while Jinshan Gold Mines Inc. (TSXV:JIN) had a market value of $940 million.
The TSX listing is “incredibly” important for Jinshan, which is 41 per cent owned by state-owned China National Gold, the biggest gold company in China, said Jinshan spokesman Frank Lagiglia.
“They basically have Jinshan as their international vehicle to really go global and become a major world mining company,” Lagiglia said from Vancouver.
“The big reason for that is that Jinshan is TSX listed. It gives us access to the North American capital markets.”
Fotheringham said while the TMX continues to push for more Chinese involvement, the exchange has no immediate plans to open an office in China.
Kenny Zhang of the Asia Pacific Foundation of Canada said Chinese investors need to understand the way business is done in Canada and follow the rules.
“Several years ago, we educated Canadian companies to understand that doing business in China should not be the same way as here,” said Zhang, a senior project manager.
“Now it’s time to tell Chinese business companies that if you want to do business internationally, the way of doing business in the international market is not the same way as in China,” he said from Vancouver.