Canadian Stocks

Business and Politics

Largest commodity exporter in America. Canada is the second largest country in the world, which stood in the shadow of the USA for many years and is now perceived as the land of trend stocks. With its large natural resource reserves, Canada is considered the most important trading partner of the USA, which leads to enormous economic benefits for the country.

In 2020, the 38 million inhabitants of Canada generated a GDP of 1.6 trillion USD. However, most people live in the southern part of the country, adjacent to the USA. In the north, there is the tundra, where very few people live due to the climatic conditions.

In recent years, it has often been observed that many "hype sectors" were located in Canada. Many young companies from fields such as cannabis, hydrogen, or blockchain have settled here. However, these trends were frequently ended with a strong downward trend initially because investors' expectations were too high.

The democratic federal state of Canada is governed by the Prime Minister. The upper house with its senators and the lower house with the democratically elected representatives together form the Parliament.

The largest companies

Financial sector dominates the list. In Canada, things look a bit different compared to the USA. Here, to be precise, there is only one technology company in the top ten: Shopify. The modular tool for online shops has already been very successful worldwide, allowing the company to grow significantly. Especially the pandemic has brought many small businesses to online sales.

In first place is the Royal Bank of Canada, which ranks 74th globally with a market capitalization of 166 billion USD. The banking sector in Canada is very solid and the banks were able to withstand the global financial crisis of 2007 quite well, resulting in decent dividends being paid out here.

Headquarters of the largest companies

Toronto as a financial hub. All major financial companies are located in Toronto, the New York of Canada. Geographically speaking, Toronto is not far from the US state of New York. Over time, a similar financial center has developed here as in the USA. Shopify is headquartered in Ottawa, the capital of the country.

The most important indices and their development

In Canada, there are two locally important indices that represent the country's performance very well. On the one hand, there is the S&P/TSX Composite Leading Index, which includes the 250 largest companies in the country. This is basically like the S&P 500 in the US. Here, the economy is usually best reflected.

On the other hand, the S&P/TSX 60 is also very interesting. This index includes the 60 largest companies listed on the Toronto Stock Exchange (TSX). With this, you have a slightly more concentrated selection similar to the DAX or the Dow Jones.

Performance of the indices

Value stocks dominate the indices. In recent years, both indices have been solid investments, providing opportunities to invest in many quality companies and generally defensive assets. Over a 5-year period, both indices have generated approximately 40% returns, but this is significantly lower compared to US indices. The reason for this is likely the low number of rapidly growing technology stocks in Canada.

Although there are many startups and trendy stocks that are growing rapidly, none are as profitable and solid in the market as the top technology companies from the USA. Shopify is the exception among banks and railroad corporations.

Trading venues and opening hours

The main stock exchange in Canada is the Toronto Stock Exchange (TSX), which is considered the most important in the country. Smaller stock exchanges include the Canadian National Exchange (CNSX) or the TSX Venture Exchange, which is based in Calgary as an electronic exchange.

The opening hours are the same as in the USA. Local time (EST), the Opening Bell rings at 9:30 am and the Closing Bell at 4 pm. Converted to our time in Germany, that means from 3:30 pm to 10:00 pm.