Economy and politics
Largest exporter of raw materials in America. Canada is the second largest country in the world, was for many years in the shadow of the USA and is nowadays perceived as a country of trend shares. Due to the large raw material deposits in Canada, they are considered the most important export partner of the U.S., which means that the country benefits enormously economically.
2020 haben die 38 Millionen Einwohner von Kanada ein BIP von 1,6 Billionen USD erwirtschaftet. Die meisten Menschen leben jedoch im Süden des Landes, angrenzend an die USA. Im Norden befindet sich die Tundra, in der aufgrund der klimatischen Bedingungen nur sehr wenige Menschen leben.
In recent years, it was often apparent that Canada was home to a lot of "hype sectors". Many young companies from areas such as cannabis, hydrogen or blockchain have settled here. However, these trends were very often ended with a strong downward trend for the time being, as 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 members of parliament together form the parliament.
The largest companies
Financial sector dominates the list. In Canada, the situation is somewhat different compared to the USA. Strictly speaking, there is only one technology company in the top ten: Shopify. The construction kit tool for online stores has already been very successful worldwide, allowing the company to grow strongly. The pandemic in particular has brought many small companies to online sales.
In first place is the Royal Bank of Canada, which ranks 74th in the world with a market capitalization of USD 166 billion. The banking sector in Canada is very solid and the banks were able to survive the global economic crisis of 2007 quite well, which means that decent dividends are also paid out here.
Headquarters of the largest companies
Toronto as a financial center. All the major financial companies are based in Toronto, Canada's New York. Geographically, Toronto is not far from the US state of New York. Over time, a similar financial center has formed here as in the USA. Shopify is headquartered in Ottawa, the country's capital.
The main indices and their development
In Canada, there are two locally important indices that reflect the country's performance very well. First, 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 contains the 60 largest companies listed on the Toronto Stock Exchange (TSX). This gives you a somewhat more concentrated selection than the DAX or the Dow Jones.
Price development of the indices
Value stocks dominate the indices. In recent years, the two indices have always been solid investments, through which one could invest in many quality companies and generally rather defensive stocks. Over a 5-year period, both indices have returned about 40%, which is significantly lower than the US indices. The reason for this is probably the low number of fast growing technology stocks in Canada.
While there are many startups and trendy stocks here that are growing fast, none are as profitable and solid in the market as the top technology companies from the US. Shopify is the exception between banks and railroad companies.
Trading venues and opening hours
The leading stock exchange in Canada is the Toronto Stock Exchange (TSX), which is considered the most important in the country. Smaller exchanges are e.g. the Canadian National Exchange (CNSX) or the TSX Venture Exchange, which is an electronic exchange located in Calgary.
The opening hours are exactly the same as in the USA. At local time (EST) the Opening Bell rings at 9:30am and the Closing Bell at 4pm. Converted to our time in Germany, that means from 3:30pm to 10pm.