Investors Flock to Canadian Stocks

Following the trend of stock talk in today’s PROFIT CONFIDENTIAL, I wanted to point your attention to something that’s beating the odds in today’s market.

Riding on the coattails of the still strong Canadian dollar, the TSX Group Inc. has recorded a 35% increase in year-over-year profit. The rising profits continue to prove the strength of not only the Canadian dollar, but the Canadian economy as well– and it seems investors all over the world have caught on to this strength.

The TSX Group, which controls the Toronto Stock Exchange, can attribute part of its profits to fees pertaining to stock market transactions, in addition to improved activity in the certain areas of the market.

Analysts expected the stock to rise from 36 cents a share, where it traded in the first quarter, to roughly 41 cents. Market watchers were pleasantly surprised to see the stock jump to 49 cents a share as of June 30. Total revenue has increased $10.6 million year over year for the three-month period. For the six- month period ended June 30, 2004, the group saw an increase of $18.3 million year over year. The numbers were released after trading closed on Tuesday of this week.

“We had a very good quarter, with strength found throughout the markets,” CEO Richard Nesbitt said in a conference call. “Market activity is high, and we’re seeing increases in virtually all of our key metrics in our three main revenue streams–of listing, trading, and market data.”

In a move that all investors should appreciate, the company also announced it would be reducing its trading fees, first by 1/5 on October 1 and then by another 1/5 on January 1, 2006.

A one-year trial period for the changes of various stocks with multiple listings in both Canada and the U.S. is “intended to better align trading fees with the prevailing mode in U.S. marketplaces, with the goal of capturing more interlisted trading volume,” the TSX said. By offering the discounts, the Stock Exchange hopes to attract more people to purchase shares in interlisted companies, which includes China-based companies as well.

If you’ve ever been interested in Canadian or interlisted stocks before, it seems as though now’s the time to start looking seriously at what’s trading on the TSE.