Dateline: 12/02/99
The Vancouver Stock Exchange is dead. Long live the Canadian Venture Exchange!
It's with a touch of nostalgia that the VSE passes into history. One of the leading venture exchanges in the world and the oldest in the Pacific Northwest, the Vancouver Stock Exchange was the sole survivor of around fifteen exchanges that were formed in British Columbia, Seattle and Portland between 1877 and 1910.
Launched in 1907, the exchange had a volume of 367,441 shares in its first year with a combined value of just $136,440. In 1998 it traded 5 billion shares with a value of around $4 billion. The pioneer exchange really came into its own in the 1960s and 1970s with the rise to prominence of firms like Placer Dome and Cominco and major gold strikes like Hemlo.
But the exchange also was surrounded in controversy. The venerable Forbes magazine called it the "scam capital of the world" in a 1989 exposé. The head of a subsequent government inquiry in 1994 called the VSE a "forum for shams, swindles and manipulations". Free-lance reporter Adrian du Plessis earned two Western Magazine Awards and one National Newspaper Award for his blistering exposés of shenanigans at the VSE and other Canadian exchanges. (The Bre-X scandal, by the way, happened on the Toronto and Alberta exchanges, not the VSE.)
Amid the controversy, the VSE became the first Canadian exchange to scrap its trading floor and become fully automated.
Michael Johnson succeeded to the presidency of the exchange in 1995 with a mandate to clean it up. And he did. Under his tutelage the VSE found its legs and developed into the "premier venture exchange in North America" in the words of Dennis Burdett, the new exchange chair.
Meanwhile across the Rockies, the Calgary Stock Exchange was founded in 1914 in the wake of the Turner Valley oil boom. It became the Alberta Stock Exchange in 1974. Like the Vancouver Exchange, the ASE originated around mineral exploration but recently developed a considerable reputation as a home for high tech venture capital. Such companies as Wi-LAN, Cybersurf and Net Shepherd populated its ranks.
Now, after eight months of hard work by employees and management of both exchanges, and the expeditious processing of regulatory changes by provincial securities commissions, the Canadian Venture Exchange has been born. It began its first trading day on Monday, the first new Canadian stock exchange in 85 years.
Although called the Canadian Venture Exchange, its trading designation is the CDNX, not the CVE as you might expect. This may lead to confusion with Canada's OTC market, the Canadian Dealing Network (CDN), but not for long. The merger of the ASE and VSE is an ambitious one and the CDN will be folded into the mix next summer, giving the exchange an Ontario presence. The Winnipeg Stock Exchange will join the CDNX umbrella even sooner - next spring.
There are currently 2500 companies listed on the new exchange, including 260 from Ontario and 160 from Quebec. There are companies from every province and territory except PEI represented.
Along with a new exchange comes a new stock index. The Vancouver Composite is gone. In its place is the CDNX Index, a compilation of about 400 companies representing 80% of the exchange's capitalization. Initial value of the index was 2000. It closed on Wednesday, Dec. 1 at 2013.55.
Exchange President and CEO William Hess said at an inaugural breakfast Monday that the exchange has a national mandate extending beyond the borders of B.C. and Alberta. In an allusion to the VSE's past reputation he pledged the exchange would have tougher standards - it would foster "appropriate commercial risk - not one associated with fraud". But risk would not be eliminated. That, after all, is what venture capital is all about.
The old VSE and ASE websites are no longer there. They redirect to the new Canadian Venture Exchange website which combines and expands on the best features of the previous sites. Archives of data from the previous exchanges remain.
"The best protected investor is the best informed" said Hess, and to that end, the online website for the CDNX includes extensive data on listed companies - 50 pages on each. Much of this information is only available on a subscription basis, but a three month trial subscription is free. Rates after that are moderate and reports can be bought singly.
One commentator has called the new exchange the "NASDAQ of the North". With a national mandate and a strong representation of junior technology companies, he could be right. The top five trading stocks on Wednesday were three Internet companies, a technology company and a mining developer.
Long live the CDNX!
(Information derived from reports in the Vancouver Sun and other sources)
The CDNX website has many features including its extensive database of information on listed companies. Other features include a complete listing of exchange member brokers, extensive market information including detailed trading activity reports on a subscription basis, new listings, and more.
Canadian
Venture Exchange
Historical
ASE and VSE Information
Companies
Comprising the CDNX Index
Index
Explanation
Exchange
Members
Daily
Market Summary
New
Listings
Subscription
Information
New
Venture Exchange sets sights on tech listings
Report in the National Post on Nov. 30, 1999.
Exchanges
start their monopolies
Financial Post editor Terence Corcoran thinks
the new Canadian Venture Exchnage and other proposed changes to
the TSE and ME are anti-competitive.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
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