The TSX Venture Composite Index is up over 40 percent since January 20. Is the Venture back? We spoke with TSXV President John McCoach to get his thoughts.
It’s been a tough few years for the junior mining sector, and those following companies listed on the TSX Venture Exchange will know that better than anyone else.
However, the S&P/TSX Venture Composite Index (INDEXTSI:JX) has been steadily rising for most of 2016, and is up roughly 42 percent since hitting a low on January 20th. The exchange is still down 66 percent since hitting highs in 2011, and was down slightly on Tuesday afternoon. But with metal prices on the rise and a positive performance for the exchange so far this year, some market watchers are starting to think that the Venture is making a comeback.
To get a bit more insight into what’s been going on, the Investing News Network took five minutes to speak with John McCoach, president of the TSX Venture Exchange. He also provided an update on how changes to the exchange proposed earlier this year are progressing.
Watch the video interview below for what he had to say:
INN: You’re retiring this year. Congratulations!
JM: Thank you. Not until the end of the year. I have a lot of work to do between now and then but I’m looking forward to that.
INN: Absolutely. And you’re leaving the Venture in good shape. It’s up 25 percent, year-to-date.
JM: It is, and I hope that when I actually leave, it will be in better shape. I’ve been with the Exchange for a while now and I wanted to leave feeling like the market was healthy and that the vibrancy that I know can be there in the market that we’ve seen many times in the past several decades is back again, and I’m feeling that.
INN: Has the market turned?
JM: I believe so. I think the market turned on January 20th. In fact we’re up 46 percent since January 20th.
JM: Yeah, it’s amazing. In fact, the TSX Venture Exchange is the best performing exchange in the world, year to date. Of course, the market came off from highs in 2011, but I feel pretty good about where we’re going.
INN: Yeah, and you mentioned that the higher trading volumes on the exchange are just as important, if not more important, as the great performance. Why is that?
JM: I think, generally speaking, a bull market on volume is always more positive sign than a market going up on lower volume, so it means that there’s more activity, more interest in the market, which fuels that force.
INN: Absolutely. What does this mean for junior mining companies listed on the exchange?
JM: Well, liquidity. Access to capital. That’s why most companies come to the market. And we’re starting to see that, we’re starting to see more finance activity already. I’m hearing more about the pipeline filling up, particularly for the projects that are a little more advanced. And of course that will help all companies eventually, but right now we’re seeing a lot of good financing activity.
INN: Right, and that will be good for investors as well.
JM: Absolutely. Well, up 46 percent since January 20th, I hope somebody is making money.
INN: Yes. Earlier this year there was also a lot of discussions about proposed changes to the Exchange. How have those been progressing
JM: Very well. We focused on three strategic priorities. We announced those in December of last year, those being [first] to reduce our clients’ costs without impacting investor confidence in the market. Two, to enhance liquidity and increase the number of investors funding TSX Venture companies. And third, to grow the stock list, but importantly to diversify the stock list. So I think we’ve got good progress on all three of those fronts.
INN: And have your priorities changed at all now that the Venture is seeing higher performance and higher volume, because I know that not everybody was on board with those changes.
JM: When we announced those changes, the intent was to go to the community, which we did very actively. We had a dozen town halls across Canada, and I just returned from similar town hall events in London and in Zurich, where we met with sixty fund managers over there, talking about the Venture market, talking about the changes we were proposing.
So we have absolutely adjusted our priorities after the consultation with the stakeholders, but the focus is still the same, Those three strategic priorities remain the same. We’ve adjusted some of the tactics based on client feedback, but we’re still heading in the same direction.
INN: Okay, that’s good to hear. And finally, back-of-the-envelope calculation, where do you think the TSX Venture is going to finish the year?
JM: My crystal ball isn’t any better than anyone else’s, but I am feeling optomistic about the direction we’re going.
INN: That’s great to hear. Thank you for joining me, John, and congratulations on your retirement and the great performance of the exchange so far this year.
JMM: My pleasure, thank you.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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