Toronto Stock Exchange (TSX) is based in Toronto, Ontario, Canada. It is ranked as the 9th largest stock exchange in the world in terms of market capitalization. The stock is wholly owned by the subsidiary of the TMX Group for the trading of senior equities. Many high-end business people from Canada and other states are represented on this exchange. There are many conventional securities, split sharing corporations, ETFs, investment funds and trusts included in these stock exchanges. There are a maximum number of mining, oil & gas companies listed on TSX than the other stock exchanges globally.
TSE is likely to descend from the Broker Association (1982) which was a group formed by Toronto Business persons. The stock market began with 13 listings which have continuously grown until recent times. TSE moved on Bay Street in 1913 and grew to become the third-largest in the North American region. TSE is the Canadian best exchange for the trading of senior-level equities. As of December 2017, TSE had 1501 listed issues (inclusive of structured financial products and ETFs). It is home to five major commercial banks: Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank of Commerce (CIBC), Toronto Dominion Bank and Bank of Nova Scotia.
TSX has increased to 2166 points which is equivalent to approximately fifteen percent since the starting of 2019. It reached an all-time high value of indexing 16669.40 in April 2019 which has enhanced its status in the world prominent exchanges. TSX (S&P) is the major stock market index tracking the performance of the largest companies by market cap on the Toronto Stock Exchange, Canada. This market has a free float market capitalization weighted index covering about 95 percent of the Canadian equities market. The base value of the index is CAD1000 as of 1975.
Difference between Canadian Stock market and US Stock market
It might appear that the Canadian stock market is similar to the US stock market but there are many differences in the approach of these exchanges. Canada is a different region and there are some things having a difference from the American market. Canadian stock market is much smaller than the US exchanges and the number of stocks is also lesser in comparison to the US market. It trades in Canadian dollars and not the US dollars. The value of the Canadian dollar is lesser than the US dollars and the fluctuations occur on a regular basis.
Canadian economy majorly depends on the natural resources and it is reflected very commonly in the market. There is a monopoly of the mining, oil and gas companies on TSX than any other stock exchange in the world. The Canadian government is different than the American region and it makes a big difference in the market. Taking a recent example of recreational marijuana bill in Canada, there is a big market arising for this segment with the most promising results assured by many companies.
Benefits of investing in Canadian Stock market
Canadian stock market is not only meant for Canadians. It can be quite advantageous for the United States and global investors as well. The major benefits of investing in Canadian market stocks are:
- Strong economy: The banking system of Canada is considered to be safe and they have huge balance sheets and a great reputation in the international market. This is a positive signal for the investors to choose the Canadian Stock Exchange listed companies and get ahead with the most rewarding results from the retail, real estate, mining, marijuana, and other sectors.
- Different Currency: The trade in a different currency can protect your US dollars. If the US currency loses its value, it might not have an impact on your purchased stocks. There are other opportunities where you can make profits with the changing value of the US the dollar. Canadian stock investments are a way to go ahead with the most promising results.
- Commodity-related stocks: The economy of Canada has strong stocks related to natural resources like oil and gas. It is one of the biggest exporters of the minerals in the world and there are many commodity-linked stocks listed on TSE. Commodities could be volatile but there are positive growth opportunities linked with them. You can make intelligent investments if you consider the reliable patterns and understand the seasonal aspect of the stocks.
Investing in the Canadian Stock Market
There are some things to know while investing in the Canadian stock market. There are many brokers linked with TSX. You can choose the most promising stock to make the move. Make sure that you check the brokerage fee and other details before starting your investments. Canadian stocks and bonds can be purchased through different levels and you can choose the most relevant way to make your right selection. Another way to purchase stocks from other exchanges through the US market is called American Depository Receipt.
Canadian Stock Market begins its operations from 9.30 am to 4 pm EST, Monday to Friday. There are pre and post-marketing trading hours offered in the US and the Canadian market has extended its session too. The market is closed on Saturday, Sunday and major holidays.
Canadian Market Trends
The economy of Canada is pretty safe and it has some strong industries with stable monetary policies. It is subjected to change in trends and the other important factors as well. The Canadian market is highly dependable on the commodities and there are variable instances changing the tone of the market. Policies can have a major impact on market trends. For example, the change in recreational marijuana laws is making a big difference in Canadian stocks related to cannabis in any way.
There are many choices for traders to choose Canadian market stocks. The market setup is a bit different from the US trends and hence, there are important aspects to take care before making any investment. There are more than 1500 companies listed on the TSX, including small to large scale segment companies. This is upcoming companies also listed on the stock lists to be included on the stock exchange list for a brighter future.