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The immense resources of the North American capital markets are increasing rapidly in importance to Australian companies, according to a senior executive of TSX Group. There have been seven Australian listings on Toronto Stock Exchange in 2007.
Rik Parkhill, President of TSX Markets, said in Perth today that accessing North American capital through Toronto Stock Exchange could help Australian companies – and especially mining companies – to unlock their full value.
“Despite its relative affluence, the fact is that the Australian market for capital is under heavy pressure in a booming economy,” Mr Parkhill said.
He added, “There are simply too many potential targets for the available domestic capital and a host of worthy companies are missing out on growth opportunities as a result.”
“The TSX has a well-established reputation as a leading global market for mining companies and is closely watched not only by Canadian investors but those in the United States as well,” said Mr. Parkhill.
“Dual listing on the Australian Stock Exchange and the TSX makes increasing sense. Many North American investors are conscious of the global significance of Australia’s mining sector but factors such as the time difference make trading via the ASX inconvenient for them. The TSX is in the right time zone for these investors – and they are familiar with it.”
Mr Parkhill’s views were endorsed by Liam Twigger, Managing Director of West Perth-based Prime Corporate Finance Pty Ltd, which has assisted a number of Australian companies to access the North American market.
“I believe one of the biggest issues facing Australian mid cap mining companies is their low valuations relative to overseas peers. North American investors are crying out for new product and opportunities but want the companies to trade in their time zone. Listing on the TSX will provide access to the deep North American capital markets, international coverage, investor base diversification and provide further liquidity for shareholders. This should translate into a rerating and improvement in value over time.”
He added, “One of the most frequent difficulties for Australian mining companies below the blue-chip tier has been constraint on the liquidity of their shares,” he said.
“This squeeze is being intensified by the mining boom and the general strength of the Australian economy. Listing on a noted international mining exchange like the TSX can break the liquidity stranglehold virtually overnight, with a natural flow-on to value,” said Mr. Twigger.
About TSX Group Inc. (TSX-X)
TSX Group operates Canada's two national stock exchanges, Toronto Stock
Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market, Natural Gas Exchange (NGX), a leading North
American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed income interdealer broker. TSX Group also owns The Equicom Group Inc., a leading provider of investor relations and related corporate communication services in
Canada. TSX Group is headquartered in Toronto and maintains offices in
Montreal, Winnipeg, Calgary and Vancouver.
