By Anirban Sen
NEW YORK (Reuters) -TMX Group, which operates the Toronto Stock Exchange, is expecting a big pickup in stock market listings heading into 2026, boosted by a robust pipeline of companies that are aiming to tap the capital markets in the coming months, executives at the firm told Reuters.
Canadian initial public offering activity has been subdued this year compared to the U.S. market for stock market launches, which is witnessing its best year since 2021. One of the reasons for the slowdown
has been U.S. President Donald Trump's tariffs on imports from Canada, according to capital market experts.
However, the recent C$704 million ($499.01 million) Toronto IPO of Brookfield-backed energy firm Rockpoint Gas Storage has raised hopes of a meaningful pickup in listings. IPOs in the U.S. have raised about $30 billion this year, up nearly 13% from last year, according to LSEG data.
U.S. PICKUP SPURS INTEREST IN CANADA
"The U.S. generally always leads the IPO market in terms of liquidity," said TMX CEO John McKenzie. "As we see deals get done in the U.S. and get priced well, that's giving the same conditions in the Canadian markets. We are seeing deals come to market, and we're seeing a deep pipeline of deals that can come (later)."
TMX, which operates an off-exchange trading platform for equities in the U.S. called AlphaX US, is looking to expand the platform by adding a new book of business, said Heidi Fischer, president of U.S. equity trading at TMX. The firm is also eyeing a bigger push into fixed-income trading as it explores launching a new alternative trading system for the asset class, said Fischer, adding that plans for the new ATS are not finalized and it is not expected to be unveiled imminently.
TMX, which opened a New York office in November to garner more U.S. business, generates more than half of its overall revenue outside Canada. In recent years, TMX has expanded its Trayport electronic trading platform for energy and commodities into the U.S. In 2023, TMX acquired U.S. data analytics firm VettaFi Holdings, which is an index provider to the exchange-traded fund industry, for about $1 billion.
"It's always been the ambition of the organization to be invested in this market as this is the most competitive market in the world, and the most liquid capital market," said McKenzie.
TMX CAUTIOUS ABOUT PREDICTION MARKETS
TMX is taking a more cautious approach than some of its larger U.S. peers toward prediction markets, which have witnessed a massive jump in mainstream investor interest after being bolstered by a friendlier regulatory regime under the Trump administration. In October, New York Stock Exchange parent Intercontinental Exchange struck a deal to invest up to $2 billion in Polymarket, while CME Group and CBOE have also unveiled plans to enter prediction markets.
"We're not comfortable with the risk associated with it for us to provide to our clients - and that's where some of the divide is coming now," said McKenzie. "It has to be demand-based. We need to be ready, but we need to see that there's a demand curve that makes sense for us."
($1 = 1.4108 Canadian dollars)
(Reporting by Anirban Sen in New York; editing by Megan Davies and Rod Nickel)
