TSX gains as TMX Group reports revenue growth, while McKenzie says tariffs and uncertainty impact confidence
TMX Group Ltd. CEO John McKenzie said conditions are favourable for companies looking to raise public money in Canada, despite ongoing economic uncertainty and low business confidence.
Speaking with BNN Bloomberg on Tuesday, he described the current environment as the best in years for companies considering initial public offerings (IPOs) or other forms of capital raising.
“The underlying conditions for companies to raise money right now are excellent, they’re the best they’ve been in years,” McKenzie said.
He pointed to strong valuations in the market, noting that the TSX is up 20 percent year over year, with abundant capital available for deployment.
Interest rates are also coming down, creating an environment conducive to raising capital.
However, McKenzie acknowledged a gap in business confidence, which remains a challenge.
Increasing the number of successful IPOs, he suggested, could help boost confidence among businesses considering going public.
He highlighted Groupe Dynamite Inc., the TSX’s only corporate IPO in 2023, as an encouraging development. “Other people can look at that and say, okay that’s something I can build on,” he said.
Despite a quiet IPO market in recent years, McKenzie said TMX continues to work with private companies exploring public financing.
“On the inside, we keep working on a pipeline of issuers that are private today that could raise public money. We’ve got 1,600-plus that we’re talking to, it’s just a question of when for them, so you need to have some positive indicators.”
McKenzie also addressed broader market concerns, particularly the political and economic uncertainty that has intensified since US President Donald Trump took office. He said this turbulence has been frustrating for TMX, as it raises additional concerns about market confidence.
Trump’s continued threats to impose a 25 percent tariff on Canadian goods entering the US could significantly impact Canadian businesses reliant on exports.
McKenzie cautioned that companies and investors should focus on long-term stability rather than short-term disruptions.
“I always remind people that we’ve actually been around for 173 years, so we’re not working quarter by quarter, we’re trying to focus on how to make this market the most competitive for the long term,” he said.
“And that’s actually what I worry about a little bit with all the Trump and tariff talk, is that we worry about the symptom and not the long-term problem.”
McKenzie’s remarks followed TMX’s fourth-quarter 2024 earnings release, which showed revenue growth of 30 percent, reaching $393m.
The results surpassed expectations of $373m.
TMX also announced an increase in its quarterly shareholder distribution, raising dividends from 19 cents per share to 20 cents.
