IIAC: RE-ENERGIZING CANADA'S PUBLIC EQUITY MARKETS
TORONTO, Nov. 12, 2024 /CNW/ - A paper released by the Investment Industry Association of Canada (IIAC) explores some of the causes of the hollowing out of equity markets in Canada and proposes solutions to reverse the process.
The statistics are startling:
- The number of companies listed on the Toronto Stock Exchange (TSX) has fallen from 1,486 in 2008 to 747 in 2023 – an astonishing 50% decline in 15 years.
- Recently, the TSX went 18 months without an Initial Public Offering (IPO).
- Canadian companies are opting to sell to foreign buyers and leave the country than go public.
Why does this matter?
"The public equity markets are a reflection of our private sector vibrancy (or lack of). Conversely, the challenges public markets face in breathing the lifeblood of risk capital have long-term consequences for the health of the private sector, including entrepreneurship, technological advancement, ability to scale and adapt to market changes, job creation, productivity and competitiveness, and regional economic balance," writes Thomas Kalafatis, the author of the paper, Managing Partner, Hullwright Advisors, and an Advisor to the IIAC.
"The hollowing out of Canadian equity capital markets has the consequent result of harming the economic position of issuers, employers/employees, investors and intermediaries," adds Kalafatis.
What should we do about it?
Kalafatis proposes multiple remedies, including:
- Reducing the fixed cost burden on issuers and intermediaries;
- Expanding participation in private placements of 'non-brokered' (non-underwritten) deals and their securities and secondary trading through transparent rules-based platforms;
- Reducing the crowding out of private sector investment by government spending and borrowing; and
- Creating a conducive policy environment for financial institutions groups (FIGs) to think big and grow globally.
Read the paper online.
For media inquiries, please contact IIAC Public Affairs.
About the Investment Industry Association of Canada (IIAC)
Asset. Ally. Advocate.
The Investment Industry Association of Canada (IIAC) is the national association comprising of investment firms that provide products and services to Canadians.
The IIAC comprises investment firms of every type including investment and mutual fund dealers, exempt market dealers, portfolio managers and investment fund managers.
Our Members:
- Manufacture and distribute a range of investment products, including mutual funds, exchange-traded funds (ETFs), and prospectus exempt products,
- Trade in debt and equity on all marketplaces,
- Provide custodial and clearing services, and
- Underwrite issuers in public and private markets.
Our Services:
- Advocacy: A strong voice for issues that matter.
- Forums: A place for industry to come together to address issues of significance.
- Education: A center for accredited educational courses – webcasts, seminars, and other events.
- Resources: A source for industry data and practice resources.
SOURCE Investment Industry Association of Canada (IIAC)
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