45% of all TSX trades came from retail investors in January, CEO says
The participation of retail investors in Canadian exchange operator TMX Group Ltd. rose to 45% of total equity trading in January, from 35% a year ago, due to the trading frenzy linked to Reddit, its chief executive told Reuters on Tuesday.
“The positive force of trading, especially stock trading, and what drives it in terms of retail interest, is something we might see for a while,” CEO John McKenzie said in an interview. .
TMX on Monday reported a 9% growth in adjusted fourth quarter earnings.
Retail investors who have been following the popular Reddit WallStreetBets forum have flocked to some US stocks in recent weeks, leading to an unprecedented short-term rally followed by steep falls.
TMX trading statistics reveal that more than 20 million shares changed hands in January 2021 on various TSX exchanges, including the main index, venture capital and TSX Alpha. In the same month a year ago, the TSX exchanges traded 11.3 million shares.
Over the past year, shares of the company that owns TSX have climbed only 1.4%, unlike gains of almost 20% in Intercontinental Exchange Inc (ICE) and the London Stock Exchange Group.
“I’m surprised the stock isn’t going anywhere,” said Barry Schwartz, who owns TMX stock as chief investment officer at Baskin Wealth Management.
“The market is at all-time highs … and that’s great for TMX.”
“TMX haven’t been the best marketers in their history,” he added. “It doesn’t have the same zing as a real big name, but it’s one of the most consistent companies out there.” McKenzie attributed TMX’s recent underperformance to its diversified business model.
“Our business tends to be a bit more balanced and we don’t get those big valuation moves that other markets” that are focused on a specific business are getting, he said, adding that over a longer period of time. long, the company behaved better.
Shares of TMX have risen about 241% over the past five years compared to ICE’s 139% gain. TMX still plans to extend derivatives trading to Asian hours starting May 30, but will only extend it by 20.5 hours instead of the originally scheduled 23 hours, McKenzie said. He is hiring 13 staff to support the move.