EXPLORATION ’94 — Stock markets cool after heady start in

Canadian stock markets, which roared early in the year, displayed renewed vigor during the summer and into autumn before cooling again in late October.

The Toronto Stock Exchange set a new milestone Oct. 11 when trading in 1994 reached $147.06 billion, the most ever recorded in one year. (The old record was set in 1993.) TSE trading value as of Oct. 11 was almost 25% ahead of the pace set last year.

The Vancouver Stock Exchange reported that September’s volume and value of shares reached their highest levels since March. September’s volume, at 472.1 million shares, rose 15% over August while value soared by 33% to $623.1 million.

The TSE composite 300 index, trading around the 4,300-point level in mid-October, reached an all-time high on March 23 of 4,609.9 points. Earlier, on Feb. 3, the Vancouver composite index peaked at 1,169.6 points, while on Feb. 1 the Montreal Exchange portfolio index hit a record of 2,182.7 points.

The Dow Jones industrial average in New York set a record on Feb. 2 of 3,975.54 points.

Healthy third-quarter corporate reports contributed to the market activity. Other highlights this year (as of mid-October) at the TSE include: * on May 9, a new daily record was established when 109.4 million shares changed hands;

* three times this year, the TSE daily volume topped 100 million shares; * 12 of the top 15 all-time record trading value days were registered this year;

* 13 trading days this year have seen trading value top $1 billion; * share trading this year was running 3% ahead of last year’s record pace (14.9 billion shares were traded in 1993).

The VSE activity in September was in part attributable to a cross-trade of a senior board company, Cominco (TSE), involving a single trade worth $164 million. The transaction drove up the value on Sept. 29 to the highest daily level ever recorded: $184.4 million.

Both volume and value figures on the VSE for the first nine months of the year (at 4.1 billion shares worth $4.9 billion) registered a 6% decrease from the same period in 1993, which experienced a significant portion of the record-setting year.

Financings on the VSE to the end of October totalled $1.1 billion, the highest level for any year since 1987.

Ironically, while stock markets have been hotbeds of activity, brokerage houses have been recording poorer financial performances. Canadian brokers, for example, saw average second-quarter profits halved (from the first quarter). In the U.S., large Wall Street broker Merrill Lynch witnessed its third-quarter income drop significantly (from the second quarter). Hurting the brokerage houses was a surge in interest rates during the middle months, which cut trading profits and reduced demand for securities.