TSE ranks fourth in the world this year
Weak finish to 2000: Tech stocks dominate list of top Toronto performers
Scott Adams
Financial Post
A 4.2% gain isn't much to brag about, but the Toronto Stock Exchange can strut
proudly on the world stage nonetheless.
The TSE 300 composite index finished fourth among the world's top 38 stock
markets over the past 12 months to Dec. 28, Merrill Lynch said yesterday.
It wasn't a year to be remembered for equities around the world, as only six
finished in positive territory.
China's Shanghai B index gained 136.6%, but there was a long drop between it
and the next ones. Ireland's bourse gained 11.7%, then came Switzerland at
5.5% and Canada at 4.2%.
The worst performer was South Korea with a 50.9% loss. The U.S. was judged
by the Standard & Poor's 500 index, which lost 10.5%, but if the U.S. had been
judged by the Nasdaq it would have been embarrassed among the bottom six
performers in the world, as the Nasdaq composite index has lost 37.2% this year.
It would have been a much better year for Canada if only the year had ended at
the start of September. That was when the TSE 300 was roaring along with a
35% gain, far ahead of most other indexes.
As for top performers in the TSE 300 this year, Kasten Chase Applied Research
Ltd. (KCA/TSE), a data security company, has popped out of nowhere to grab
top spot so far. With one trading day left in 2000, it has gained 730.8% this
year.
It was only added to the 300 index this month. Before this year, Kasten Chase
struggled for recognition, especially after it lost a big part of its revenue when
customer Dow Jones Markets was sold a couple years ago.
The stock rocketed as high as a close of $16.75 in March during the technology
craze, but has still managed to gain $4.75 to $5.40 on the year. This fall, the
small-cap play got a lot of mileage out of a deal to provide security software to
the White House. The size of the deal wasn't disclosed, but company followers
figured it was a positive sign if the software is good enough for the U.S. president.
Three of the top 10 performers in the TSE 300 this year were biotechnology companies, while eight of the
top 10 were related to technology or biotechnology.
Of the two non-technology plays, Ivanhoe Energy Inc. (IE/TSE) started to take off in October after it
entered into a project in Western Australia with Syntroleum. It is now up 164.8%.
Insurance company Manulife Financial Corp. (MFC/TSE) hit the big time, gaining 157.5% to close yesterday
at $47.50. It went public in September, 1999, at $18 and now is the sixth-largest stock on the TSE,
vaulting ahead of all but two of Canada's big banks and helping the financial services subindex become the
top performer this year with a 47% gain.
A couple of other stocks had breakout years. CAE Inc. (CAE/ TSE), a diverse simulation systems and
technology company, was a frustratingly dull stock for years because of a lack of consistent and focused
earnings growth. But profits improved this year and it has gained 147.5% to $24.50.
Com Dev International Ltd. (CDV/TSE) is a turnaround story to warm the hearts of shareholders. The stock
peaked at a close of $40.15 in 1997, before all the hype started to unwind on declining sales, heavy losses
and restructuring. It closed yesterday at $16.10, up 242.6% on the year, as growth and profitability
returned.
Among the big losers, Laidlaw Inc. (LDM/TSE) has melted down 98.4% this year and lost US$2.2-billion in
value as it suffers the fallout of failed expansion in the U.S.
Geac Computer Corp. (GAC/TSE) is in talks with its bankers about its credit facility and lost 91.5% .
Imax Corp. (IMX/TSE), the large-screen theatre company, had its debt downgraded by Moody's Investors
Service recently on worries that its theatre-chain customers may not be able to pay their bills. The
company has a "rapidly eroding liquidity position and a ... general lack of financing options," Moody's said.
No wonder the stock fell 89.9%.
CrossKeys Systems Corp. (CKY/TSE), a telecommunications software company, fell 89.7% and is troubled
enough that it had to accept a loan from its chairman to keep operations running.
The high price of oil gave the oil and gas subindex the second-best performance on the TSE this year.
Otherwise, it was a year for safe stocks, as the pipelines, conglomerates and utilities subindexes had the
best showings.
Nortel Networks Corp. (NT/TSE) dragged the industrial products subindex down to the bottom of the
subindexes last year, even lower than the perpetually out-of-favour metal and mineral index. Before the
Nasdaq bubble popped, Nortel was worth slightly more than one-third of the TSE 300, but it has fallen
60.5% in the past four months and now accounts for 17.9% of the index.
sadams@nationalpost.com
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