_{Advertisement feature _{TSX and the North
American capital solution}}

TSX and the North American capital solution

By Toronto Stock Exchange

In 2020, the S&P/TSX Renewable Energy and Clean Technology Index* was the top-performing index on Toronto Stock Exchange (TSX), increasing by 74 percent for the year. It was an impressive performance from a group of companies doing business not just across North America but also all over the world. This matters because as public market activity picks up in both Canada and the US, the sector and geographies where a company conducts its business can be critical inputs into the listing decisions companies make and the investor base they have access to.Whether a company is contemplating an IPO or doing a transaction with a special purpose acquisition company (Spac), it is making a series of decisions about two things: the first is access to capital for the company and the second is access to liquidity for its investors.Currently, both the IPO and Spac markets in Canada and the US are very active, driven by entrepreneurs and an investor base sensing opportunity. This heightened investor interest is a result of changes in consumer and business behavior due to the pandemic, or industry transitions like the one being contemplated by the energy and transportation sectors around vehicle electrification.

In the last five years, public companies in Canada raised C$240 bn of equity capital, comparable to the equity capital raised over the same period in the UK

North American dual listings work
TSX is home to more than 180 companies that are also listed on Nasdaq or the NYSE. Explaining why dual listings work so well for companies isn’t necessarily intuitive, but it is worth analyzing:

Access to investors – Canada has an institutional investor base, including globally recognized pension funds, with more than C$5 tn in assets under management. Canada also has a strong retail investor network; companies know that the pathway to access the Canadian retail investor base is through Canadian banks and a listing on TSX

Increased research coverage – Canadian banks provide critical research support to companies listed in Canada and often at earlier stages than analysts in the US. As an example, DIRTT Environmental Solutions, which is listed on TSX and Nasdaq, has three Canadian research analysts and three US research analysts, providing it with increased coverage and profile

Increased liquidity through seamless North American clearing – Companies listed on TSX or TSX Venture Exchange trade on all 14 capital marketplaces in Canada, while a listing on Nasdaq or the NYSE gives them access to 50 capital marketplaces in the US. All shares traded in North America clear seamlessly over the border between Canadian and US markets. Liquidity is further enhanced by opportunities for currency arbitrage between the two countries.

The TSX advantage
In the last five years, public companies in Canada raised C$240 bn of equity capital, comparable to the equity capital raised over the same period in the UK.In fact, for firms located in Canada and companies operating in sectors such as clean technology, renewable energy, battery metals or emerging categories like eSports, a TSX listing not only provides access to a broad base of knowledgeable and motivated institutional and retail investors through a seamless multi-market trading system within North America: it also raises opportunities for inclusion in passive investor products like indexes such as the top-performing S&P/TSX Renewable Energy and Clean Technology Index.

Helpful guides & resources

^{*The S&P/TSX Composite Index and the S&P/TSX Capped Information Technology Index (the ‘Indices’) are a product of S&P Dow Jones Indices LLC or its affiliates (‘SPDJI’) and TSX Inc (‘TSX’). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (‘S&P’); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (‘Dow Jones’); and TSX® is a registered trademark of TSX. SPDJI, Dow Jones, S&P, their respective affiliates and TSX do not sponsor, endorse, sell or promote any products based on the Indices and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the Indices or any data related thereto.}

^{©2021 TSX Inc. All rights reserved. Do not copy, distribute, sell or modify this document without TSX Inc’s prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this article, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. The views, opinions and advice provided in the article are those of the individual authors. This article is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any marketplace, exchange or securities referenced in this publication. TMX, the TMX design, The Future is Yours to See, Toronto Stock Exchange, TSX, TSX DRK, and Voir le futur. Réaliser l’avenir are the trademarks of TSX.}