Investors Look to Canada

Terry Flanagan

With the global macroeconomic issues ongoing, many market participants have turned toward Canada as a safe haven of sorts.

“There is now more interest in investing in the Canadian dollar, central banks and Canadian denominated assets,” Alain Miquelon, president and chief executive officer of the Montréal Exchange, told Markets Media. “This is a global trend. What Canada offers is a sound banking system, that’s a bit of a safe haven. You are seeing a shift of capital into Canada. The banks and brokers are responding to their end client needs and beefing up their Canadian operations.”

TMX Group’s Montréal Exchange has recently expanded its sales capacity into the U.S. with the opening of a new office based in New York. Foreign interest from investors looking to trade Canadian derivatives has been growing in recent months, as the global markets reeled from sustained market volatility.

“The level of activity is up about 75% over the last 2 years in terms of trading volumes,” said Miquelon. Futures trading is global and the activity there continues to remain high.”

With the new stateside presence, the MX will be able to offer the local trading community more timely and relevant information, allowing new and existing market participants to trade in the Canadian markets.

TMX recently  announced the expansion and upgrade of its co-location facilities, which goes into effect Q4 of this year. Increased demand from buy-side participants, as well as vendors and other service providers has sped up the latest phase of upgrades. The facility provides low latency access to the TSX, TSX Venture, Montréal Exchange and TMX Select trading engines and market data feeds, which account for 71% of Canadian equities liquidity and 100% of exchange derivatives liquidity.

TMX is currently the subject of a pending takeover by Maple Group, a consortium of Canadian banks and financial institutions. The regulators poring over the deal are mainly concerned about the potential conflicts of interest that may arise from having banks and financial institutions controlling a majority of securities trading in Canada.

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