TMX CEO says mining, foreign firms keeping Canada IPO interest strong

Toronto Stock Exchange operator TMX’s CEO said the IPO pipeline in Canada remains strong with about 1,600 companies at varying stages to list, despite a US software selloff that created ripples in the North American market.

Canada’s strength in the mining sector and strong commodity prices have kept IPO interest high, with listings expected to rebound after only two new companies entering the TSX in Toronto last year, CEO John McKenzie said in an interview.

He said up to half of the 1,600 companies are from outside Canada, with many attracted to TMX’s venture ecosystem that allows early-stage companies to raise capital.

The exchange has actively courted potential listings overseas, McKenzie said.

“We have been engaged in the Middle East. That’s an area that is actually transitioning to more of a mining economy … We have resources that are on the ground in multiple jurisdictions, like South America, like Australia, good resource economies,” McKenzie said.

Companies are looking beyond IPOs to access the public market, including reverse takeovers, direct listings and graduations from TSXV to TSX, McKenzie said. Some early-stage companies also explore the TSX Venture Exchange’s capital pool company program that provides an alternative mechanism for private companies to raise capital and go public.

“What is different now versus what it was six months ago is the number of companies that we are engaged with, that are on a public company track, that are actually doing the work that they’re getting a public company ready, they’re engaging with investors … That is a deep pipeline,” he said.

Markets have whipsawed in recent days over concerns artificial intelligence would disrupt basic business models, especially in software. That has created doubts about a largely expected rebound in IPOs south of the border.

“While this noise is a bit more technology-based or software-based, there’s also been a lot of continued strength around commodities. We’ve got a lot of mining companies and resource companies that are in our pipeline,” McKenzie said.

(By Nivedita Balu; Editing by Chris Reese)