Alberta Stock Exchange says it held its own during 1989

It may be regarded as the little brother among the family of Canadian stock exchanges, but in 1989 the Alberta Stock Exchange more than held its own in a competitive market environment.

The volume of 745 million shares traded last year on Canada’s fourth largest stock exchange was a record, and total share value was up 60% from 1988 levels.

While the $741.7 million generated by trading activity last year pales in comparison to the $83.5- billion worth of shares traded in Toronto and $20.4 billion in Montreal, the ASE’s position as a junior market for startup companies appears secure. Overall volume and value through out the year increased steadily from 1988 levels with the average daily volume reaching three million shares worth $2.9 million.

Ian Brown, the Alberta exchange’s vice-president of listings, attributed the increase in value to new listings like Royal Trust and Hees International Bancorp., which together accounted for over $216 million in trading value. However, he admitted that the effects of the 1987 market crash made 1988 an exceptionally low year for the resource-oriented Alberta exchange.

An indication of Alberta’s dependence on the mining and resource sector is the fact that of 851 companies listed on the exchange last year, 478 were natural resource companies.

Toronto-based Bitech (ASE) and Savanna Resources (ASE) topped a list off 10 volume leaders which includes five other names from the mineral exploration sector. The others were Baloil Resources (ASE), Pan East Resources (ASE) and Argus Resources (ASE).

A $12-million option agreement with Equity Silver Mines (TSE) at the Nugget Pond gold project in Newfoundland made Bitech the most active issue in terms of number of shares traded.

Savanna Resources, which optioned its Turner-Albright base metal property to Aur Resources (TSE), ranked second last year in the Alberta volume standings. Both Aur and Equity Silver have since elected not to exercise those options.

In a bid to strengthen its listing requirements and weed out inactive companies, the exchange last year increased the rules relating to the minimum market value of shares traded annually to $50,000 from $25,000.

Under the new guidelines, mining companies are required to have at least $25,000 in working capital or risk being categorized as inactive and given one month to submit an outline of how it plans to reactivate.

The companies will then be sent a second notice after which the exchange reserves the right to delist or suspend the inactive company after a period of six months. Looking ahead, Brown hopes that the Alberta Stock Savings Plan is reinstated this year with some minor changes and that the number of new listings will increase by about 100. In 1989, the Savings Plan accounted for about $50 million in initial public offerings and $40 million in secondary issues, Brown said.

While the Canadian Over The Counter Trading System (COATS) appears to be giving Alberta some competition as a vehicle for junior issuers to raise capital, Brown said he and his colleagues are not concerned.

A portion of the $562 million worth of trading activity generated on COATS last year was attributable to companies delisted from Alberta for breach of rules, according to Brown.