The strong, record-setting financial performance of Canadian and international public securities exchanges in recent years is no secret to anyone. Recent bullish markets are the result of a confluence of events and interacting factors. These include sustained national economic expansion, easier access to foreign capital markets, high corporate profits, low interest rates, a low Canadian dollar and demographic changes that have fuelled greater household demand for stocks. No less influential a variable is the dominance of institutional investors, including pension funds, in shareholding.
The vast majority of public securities trading in this country - approximately 80 percent, calculated on the basis of value - occur on the Toronto Stock Exchange (TSE). At around 15 percent of total trading, the Montreal Exchange (ME) is the second largest securitied marketplace, followed by the Vancouver Stock Exchange (VSE), the Alberta Stock Exchange (ASE) and the Winnipeg Stock Exchange.Endnote 79 Total listings, including inter-listings, vary widely between these exchanges and are changeable over time.
The market analysis company SEI estimates total capitalization of the four major Canadian exchanges to have been approximately $800 billion in 1997, a near doubling since the beginning of the decade. In a global context, Canada makes up over 2 percent of worldwide securities exchange capitalization that came close to reaching $30 trillion at the end of 1997.Endnote 80
Appreciating public equity prices and other developments that have led to recent intensified trading, have also contributed to important structural shifts within Canadian exchanges. Among these is the changing composition of investors. Though exchanges have witnessed an unprecedented increase in retail sales, representing more participation by individuals, the impact of even this trend is bested by an enhanced pension presence. The TSE has reported that in the period between mid-1980s and the mid-1990s, pension funds replaced individuals as the top investor and shareholder group in Canada (see Figure 10). Total equity ownership of the former on the TSE is estimated to have risen to 40 percent by 1996.Endnote 81