Equity Opportunities in Canadian Capital Markets
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Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) – Canada’s major equities markets – are home to more oil and gas and energy services companies than any other global exchange group. Ranked first in the world by the number of listings in the energy sector, TSX and TSXV are the world’s leading marketplaces for oil and gas companies to list and go public.
More than 360 oil and gas companies are listed on TSX and TSXV, with a total market capitalization of over $407 billion. About 10% of these companies are headquartered outside of Canada. Supported by reliable access to North American and global capital, these companies have operations on several continents and maintain strong ties to key markets globally.
Oil & Gas companies listed on TSX and TSXV with global operations
As of December 31, 2013.
Note: a single company may have operations or assets in multiple countries.
In 2013, TSX and TSXV were second in the world for capital raising in the oil and gas sector. Companies in the sector raised more than $5 billion on the Exchanges last year, through 246 financings. Slightly more than half of this equity capital was raised by listed companies with oil and gas plays in Canada ($2.7 billion); about 20% ($980 million) was raised by oil and gas companies with operations in the US market; and a smaller portion of capital raised, 15% ($789 million), went to companies with projects in Africa. The remainder of equity capital was raised by listed companies active in the UK, Europe, the Middle East, Russia, and Latin America.
Capital raising momentum in the sector so far this year has been encouraging, with over $2.5 billion raised by TSX- and TSXV-listed oil and gas companies during the first quarter of 2014. To put this into perspective, at this time last year, oil and gas companies on both markets had raised $568 million.
Taken together, TSX and TSXV are also global leaders in energy services. More than 20% of the world’s public energy services companies are listed on the Exchanges, this represents a total market capitalization of over $46 billion.
The Cluster Effect
TSX and TSXV are home to about one-third of the world’s public oil and gas companies. Generally, the best place for a company to go public and raise capital is where most of its competitors and peers are listed. The company you keep, so to speak, puts you on the radar. This “cluster” effect suggests that bankers, advisors and analysts will pay attention to the companies, attract the right sort of investors and, ultimately, deliver the best valuation and the highest liquidity. TSX and TSXV score highly in this respect, with more public oil and gas companies listed on the Exchanges than on any other in the world.
Two Tiers of Investment Opportunities
Many of the world’s exchange groups restrict public listings to companies that have advanced beyond their early stages of development, and this trend is apparent in the energy sector. The two-tiered structure of TSX and TSXV challenges this convention and enables global investors to capture opportunities for growth earlier in a company’s development.
TSXV provides emerging companies with access to a well-regulated marketplace for venture capital. The public venture market enables innovative oil and gas and energy services companies to attract financing as they proceed through the critical stages of their lifecycles. Exploration-stage oil and gas companies can grow on TSXV and, as they develop and mature, junior energy companies have the potential to graduate to TSX, the senior market. In fact, approximately 43% of oil and gas companies on TSX are graduates of TSXV.
Advantage Canada: A World-Class Investment Destination
The public equities markets in Canada offer a unique proposition:
- Deep understanding of the oil and gas sector and relevant listings requirements;
- Sophisticated, educated, and informed ecosystem of brokers, banks, analysts, and investors;
- Successful listing continuum from the junior board (TSXV) to the senior market (TSX);
- Proven expertise in small- and medium-sized enterprises (SMEs); and
- Secondary market liquidity.
TSX and TSXV provide global oil and gas companies with enhanced visibility and reach in a competitive global environment. Over 200 global analysts cover TSX- and TSXV-listed oil and gas companies and it is estimated that, taken together, over 40% of trading across all sectors on the Exchanges originates outside of Canada.
Building Ties with Africa and Latin America
Canada has strong commercial ties with African and Latin American countries, and TSX and TSXV play an important role in growing these relationships. The Exchanges provide companies operating in these regions with enhanced visibility and reach, while their shares trade in stable, liquid markets in which retail and institutional investors understand the nature of their industry. There is optimism that investor sentiment is improving, particularly for African projects.
There are currently 43 TSX- and TSXV-listed oil and gas companies with projects in Africa, and these companies raised nearly $790 million in equity capital in 2013. For Latin America, 36 oil and gas companies listed on the Exchanges have projects in the region, and these companies have raised $500 million in equity capital in the last two years.
TSX and TSXV will be hosting an investor day in New York City on May 1, 2014, which will showcase leading oil and gas companies listed on the markets with assets in Africa and Latin America. Sponsored by PwC and the Oil Council, the event will feature presentations from these companies as well as Kevan Cowan, President of TSX Markets and Group Head of Equities at TMX Group.
–Monica Rovers; Head, Business Development, Global Energy
Toronto Stock Exchange and TSX Venture Exchange, Calgary Office
Learn more about NYSSA's upcoming "TSX Africa & Latin American Energy Investor Day," on May 1,2014.
Unless noted otherwise, all stats are as of March 31, 2014.
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