Canada is recognized as the world's leading capital market
for natural resource companies. Its stock exchanges boast over half
of the world's public mining companies and over one-third of
the world's public oil and natural gas companies. Canadian
stock exchanges also present a recognized destination for foreign
natural resource companies to raise capital—and function as a
significant source of acquisition targets and merger partners for
international major and mid-cap companies.
In conjunction with Thomson Reuters Practical Law, Darrell
Peterson and James Bartlett of Bennett Jones LLP have published an
informative paper providing a discussion of the factors which
contribute to the prevalence of natural resource issuers on
Canada's stock exchanges, including:
How Location of Industry Peers Attracts
Investment. The mining sector in Canada, while comprising
approximately 10 percent of the principal exchanges listings (based
on market capitalization), is in fact home to more listed mining
companies than any other stock exchange in the world. This equates
to 62 percent of the world's public mining companies being
listed in Canada. Similarly, there are more oil and natural gas
companies on the TSX and TSXV than on any other stock exchange in
the world with 30 percent of the world's public oil and natural
gas companies being listed in Canada.
A Review of the Unique Listing Requirements of the TSX
and TSXV. Listing standards for the Canadian stock
exchanges offer financial tests specifically applicable to oil and
natural gas and mining companies. These industry-based requirements
can be particularly attractive to newly producing companies or
companies in the exploration or development stage that may not yet
be able to satisfy financial tests based on profits or
How the Strength of Analyst Coverage in Canada Promotes
a Well-Functioning Market. The
analyst community in Canada is sophisticated with most banks and
other intermediaries providing these services having a number of
specialists on staff including specialists with oil and natural gas
and mining training. The strength of analyst coverage of the
Canadian natural resources market contributes to a well-functioning
market with broadly disseminated analyst information.
An Examination of the Sophistication of Canadian
Institutional Investors with Natural Resources Knowledge.
Canadian investors (both institutional and retail), trade natural
resources equities at volumes higher than other industries listed
on Canadian stock exchanges. While second to financial services on
the TSX and TSXV in terms of market capitalization, natural
resources accounts for the highest percentage of trading
How the Canadian Regulatory Environment Promotes
Investment. Securities laws and regulations remain an
important determinant of where securities are issued, how they are
valued, who owns them, and where they trade. Issuers have an
incentive to raise capital in jurisdictions who's regulatory
regime facilitates a lower cost of capital. Overall, Canadian
capital markets are efficient in many respects and measure up well
when compared with those of other countries of comparable
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