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TSX Composite Index
About TSX (Toronto Stock Exchange)
TSX, Toronto Stock Exchange, TSE, TMX, TSX Group, TMX Group, Exchange, Stock
Exchange, CDNX, Canadian Venture Exchange, TSX Venture Exchange
The major investment projects during the first few centuries of Canada's
European settlement were borrowed primarily from London's capital market. In the
beginning, the public shares of large corporations, such as the Grand Trunk
Railway, Hudson's Bay Company, and the Bank of British North America, were held
in Great Britain. In the mid-19th century, when a Canadian government, a
Canadian railway, Canadian banks and Canadian mining stocks and bonds started to
become established, financial brokers began to appear in Canada.
The Toronto Stock Exchange was likely created by the Association of Brokers (a
group of Toronto businessmen) on July 26, 1852. However, no official records of
the group's transactions have survived. Then, on October 25, 1861, at the
Masonic Hall, twenty-four business men officially created the Toronto Stock
Exchange. The main objective of these businessmen was to establish
communications among members to facilitate the exchange of stocks, shares,
bonds, mortgages, and other loans.
At that time, in 1861, fewer than two dozen public companies were listed on the
Toronto Stock Exchange (called TSE, but not to be confused with the current
abbreviation for the Tokyo Stock Exchange). There was only half an hour of
trading per day and only two or three transactions. Most of the listed companies
were related to banks and real estate.
Sixteen years later (in 1878), the exchange was formally incorporated by an act
of the Legislative Assembly of Ontario. Trading become to grow slowly until the
outbreak of the First World War when the exchange was shut down in 1914 for
three months for fear of financial panic due to war in Europe. The war showed
that the Canadian market could not rely on the British market to raise capital.
So, the Canadian government raised billions of dollars by selling bonds to its
own citizens and Americans on the New York bond market. World War I stimulated
the development of Canadian industrialization. This generated a demand for
capital. As a result, the volume of shares traded on the TSE had grown to more
than 10 million a year by the late 1920s.
As in the USA, the value of stocks fell significantly during the Great
Depression of the 1930s. In order to survive the economic crisis, the Toronto
Stock Exchange and the Toronto Stock and Mining Exchange (TSME) were merged. The
merged markets chose to keep the Toronto Stock Exchange name. Because of this
merger, the TSE ranked third among North America's largest exchanges in 1936.
Since then, the TSE's trading volume and listings of public companies have
continued to grow, although there have been a few sharp declines, such as those
that occurred during the global stock market panic of October 1987, 2000-2003
and 2007-2008.
In the 1970s, the Toronto Stock Exchange was the world's first exchange to
develop a computerized trading system (introduced as CATS - Computer Assisted
Trading System) for some less liquid stocks. In 1997, the TSE closed its trading
floor completely in favor of electronic trading.
In competition with foreign exchanges, the TSE and the Montreal Exchange (ME)
agreed in 1999 to move all trading of preferred stocks to the TSE and trading of
derivatives to the ME. At the same time, the Vancouver Stock Exchange and the
Alberta Stock Exchange merged to form the Canadian Venture Exchange (CDNX).
Later, the Canadian Dealing Network, Winnipeg Stock Exchange, and equities
portion of the Montreal Exchange merged with CDNX.
Two years later, in May 2001, the TSE acquired ownership of the Canadian Venture
Exchange (CDNX) by creating the TSX Group. The TSE acronyms was renamed TSX.
That put TSX and TSX Venture Exchange into first place in the world for listed
oil and gas companies. In 2008, TSX Group Inc changed its name to TMX Group Inc.
The TSX stimulates the private sector's ability to create wealth and jobs, and
provides a gateway to Canada for global investors. The S&P/TSX Composite, the
main index of the Toronto Stock Exchange. The exchange's normal's trading
session is from 9:30 am to 4:00 pm ET with a post-market session from 4:15 pm to
5:00 pm ET on all days of the week, except Saturdays. Sundays and holidays are
declared by the Exchange in advance.
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