EXPLORATION ’93 — Stock market business booms

Investors in Canadian stocks have been out in full force this year.

The Toronto Stock Exchange in particular has been on a roll, setting records for value of trading, and daily, monthly and annual volumes. In mid-November, the TSE 300 composite index closed above 4,300 points for the first time.

On the Montreal Exchange, the market portfolio index recently topped 2,000 points for the first time since December, 1989.

Out west, the Vancouver Stock Exchange set records for monthly and quarterly volumes and in late October posted a record yearly volume.

The Alberta Stock Exchange reports a significant rise in its share of stock trading in Canada this year.

In New York, the Dow Jones industrial average has also been on a record pace; in mid-November, it reached the 3,700-point level for the first time. Helping to bolster the market activity in Canada has been a flurry of trading in gold and other resource stocks, as evidenced by the TSE’s gold and silver sub-index racing above 10,000 points at the end of October. That sub-index ended 1992 at the 5,250 level. A gold-price rally earlier this year, which briefly took the yellow metal to better than US$400 per oz., was a large factor in the trading.

On the TSE, it took only 10 months for the 1993 value of trading to exceed the $100.2-billion mark set for the entire year of 1987. The yearly mark for the number of shares traded tumbled in July; that number recently hit 10 billion shares (and climbing). A 1-day record of 105.2 million shares changing hands was set Nov. 9.

In Montreal, the largest single-day volume occurred Oct. 13 when more than 22.1 million shares changed hands on the ME. In terms of value, trading in June totaled more than $3 billion, the best month ever. On a yearly basis, the value of trades, after 10 months this year, surpassed the $21.87 billion traded in 1987.

On the VSE, it took 10 months for the yearly volume to surpass the 4.79 billion shares traded for all of 1987. The highest monthly volume (613 million shares) was set in April and the highest quarterly volume (1.7 billion shares) was set during the April-June period.

Reasons for all of the stock-market activity include a raft of new stock issues (the oil and gas sector has been busy in this regard), some high-profile initial public offerings and a string of secondary offerings. As one would expect, brokerage houses have benefited, with members of the Investment Dealers Association of Canada reporting record profits for 1993. In terms of the value of shares traded in Canada (as of Sept. 30), the TSE accounted for about 79%; the ME, 16%; the VSE, 4%; and the ASE, 1%. In terms of volume (as of Sept. 30), the TSE accounted for about 57.5%; the ME, 11%; the VSE, 23%; and the ASE, 8.5%.