Canada's TMX Group shares surge to their highest level in over a year

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On Thursday, August 5 - TMX Group shares rose to their highest level in over a year after the Canadian exchange operator reported second-quarter profit that beat analysts' expectations late on Wednesday and said the pipeline for capital raisings has not slowed during the summer.

TMX Group also expects a substantial increase in high-denomination bonds to finance large government expenditures and that will help drive the derivatives market linked to these securities, which has been adding products to.

The shares surged with 5.8% in their morning trading to C $144.19, the highest intraday level since July 2020 in Toronto. They are up 13.3% this year, compared with a gain of 3.4% for the London Stock Exchange and a 17.1% decline for Intercontinental Exchange Group.

Adjusted earnings per share climbed from C $1.52 a year earlier to C $1.90 in June, the company said in a statement Wednesday, beating estimates of C $1.72.

Revenue growth, which helped lift earnings, was largely driven by a 44% jump of new listings with smaller contributions from its equities and fixed income trading and clearing business and data analytics unit, the company said.

The company expects continued strength in its capital raising business as, contrary to expectations, the pipeline of new issuances has not slowed for new issuances during the summer, the executives said on an analyst call on Thursday.

TMX saw the retail trading volumes up 37% in the second quarter vs two years ago, although they were off from first-quarter levels, executives said. Volumes were up in its retail investors-focused indexes between 60% & 80%, the company said.