TORONTO — TMX Group Inc. (TSX:X) reported slightly improved second-quarter profits and revenue as a greater number of new companies listed on Canada’s largest stock exchange.
Thomas Kloet, chief executive of the stock exchange operator, told analysts in a conference call Wednesday that the main exchange logged 45 new issuers during the second quarter, of which 28 were initial public offerings.
“On a year to date basis there were 94 new listings on TSX, which outpaced the same period in 2009 by more than 150 per cent,” he said.
TSX Venture Exchange posted 43 new issuers in the quarter, bringing its tally to 81 new issuers for the year, he added.
TMX Group’s net income in the second quarter was $47.6 million, or 64 cents per common share — up two per cent from a year before.
Revenue increased by three per cent to $142.7 million.
In recent years, the exchange has competed against new entrants in the market, including the Alpha trading system for large-volume issues, the Canadian National Stock Exchange and alternative trading systems.
Alpha Group was launched by investors that include the brokerage arms of Canada’s six biggest banks, and it has led a highly competitive march by charging lower trading fees.
The TMX Group responded by slashing its securities trading fees earlier this year for both its main exchange and the Venture Exchange, and unleashed an incentive program for companies with high volume trades.
Kloet said in the second quarter there was a surge of activity in derivatives trading at the Montreal Exchange, where volumes increased by 32 per cent over last year.
The TSX set a record trading volume in May with 1.6 million trades, besting a previous record set in September 2008, even though overall trading volumes were down 21 per cent for the quarter.
Kloet suggested that the weaker trading could be partly due to events surrounding the G20 which all but brought Toronto’s financial district to a crawl for about a week.
However, he remained optimistic for future trading volumes.
“Our recent technology upgrades have made it possible to easily accommodate these record breaking trading levels,” Kloet said.
“We believe that our technology investments as well as our recent pricing adjustments are critical factors in maintaining TMX Group’s equity trading market share which has been largely stable since the beginning of the year.”
TMX Group employs 844 people across its organization and operates the Toronto Stock Exchange as well as several other markets including the TSX Venture Exchange, the Montreal Exchange, the Natural Gas Exchange and the Boston Options Exchange.
Its principal activities are to provide electronic, screen-based equity securities market information.
Shares of TMX Group were down 39 cents at $28.93 near midday Wednesday.