Despite slowing economic activity, the CEO of the company that operates of the Toronto Stock Exchange (TSX) says his business has seen strong revenue growth this year thanks to a focus on providing data and information services.

TMX Group CEO John McKenzie told BNN Bloomberg that despite continued weakness in capital markets, the company has been able to weather the storm by diversifying the services they offer.

“You're seeing the impact of what's been a long term strategy to transform TMX into being not just an operator of markets … but to really be much more of an information business providing more solutions to clients that are data oriented,” McKenzie said in a Tuesday television interview.

“Capital markets activity has been much weaker; it's been very challenging, but we've been able to grow because we've had the strength in the data businesses that are more resilient, more global in nature, and provide a broader breadth of services.”

He made the comments after TMX Group reported on Tuesday that its third-quarter profit rose compared with a year ago.

The result was up from a profit of $81.0 million or 29 cents per diluted share in the same quarter last year, and the company said its third-quarter revenue totalled $287.3 million, up from $266.8 million a year ago.

DATA SERVICES

TMX Group’s global solutions and research services business involves real-time and historical data on Canadian and global markets.

McKenzie said the strength the economy affects TMX Group’s data services business, as cost pressures push many of their clients to scale back on their subscriptions for market data and information.

However, McKenzie said the company is attempting to transition to more of an “a la carte service,” which he hopes which will provide more value to clients in the long term.

“That tends to be a stickier relationship over time, because it adds more value for the clients and more value to the relationship for us, and it's not about how many traders you have in the seat on any given day,” McKenzie said.

“That's what we're trying to do – transition the business to ensure it’s kind of a value-for-value relationship and that we’re giving that over the longer term.”

TSX OUTLOOK

Estimates released from Statistics Canada on Tuesday suggested the economy shrunk in the third quarter. McKenzie called the figures “validating,” noting that capital markets had already been feeling the effects of a downturn.

Despite the challenging environment, McKenzie said the TSX still has a “very strong pipeline” of companies that could raise money with the exchange, though he noted it may take time before they are confident enough to test the market.

“That being said, at some point, you're going to have companies that are going to need to raise money regardless,” McKenzie said.

PRESENCE IN ISRAEL

McKenzie said that in the near term, the company is closely monitoring the geopolitical situation in the Middle East, as 16 Israel-based companies are listed on the TSX and the company has employees on the ground there.

“Our number one piece has been to ensure the safety of our employees, the health and safety of our clients, and where we can, extend ourselves to provide support,” he said.

With files from the Canadian Press