Canadian stocks, already in a correction after a plunge from record highs, aren’t headed for a bear market though cannabis shares may fall further, according to the head of the Toronto Stock Exchange.

Corporate fundamentals remain healthy and should be enough to halt the recent market slump before it turns into a bear market, often defined as a decline of 20 per cent, said Lou Eccleston, chief executive officer of TMX Group Ltd.

“There’s a tremendous impact going on right now from political events and leadership changes and trade wars, and all those things tend to impact the marketplace and impact sentiment,” Eccleston told Bloomberg Television Tuesday in an interview at the Canada FinTech Forum in Montreal. “But so far, as long as the long-term fundamentals stay in place and these things smooth themselves out, we’re hopeful that things will get back on track.”

The S&P/TSX Composite Index has lost about 11 per cent form its July high, including about 8 per cent since the beginning of October.

The story may be different for cannabis stocks, he said. They have been tumbling amid the broader market rout and concerns about high valuations, supply shortages and limited distribution networks in Canada, which became the first major economy to legalize recreational pot on Oct. 17. The BI Canada Cannabis Competitive Peers index has lost 25 per cent in two weeks.

“Any industry that goes up really fast is going to have some kind of shakeout, some kind of correction,” Eccleston said. The sector still has “uncertainty with jurisdictional issues, still has uncertainty in regulatory issues.”

Pot Listings

Recently, several Canadian cannabis companies have listed or announced plans to dual-list on major U.S. exchanges, including Canopy Growth Corp., Aurora Cannabis Inc. and Aphria Inc. Eccleston said this doesn’t concern him, and could actually benefit the companies’ Canadian stocks.

“We never discourage or look negatively on a company dual-listing,” he said. “We actually find that it’s accretive to the company’s liquidity, not the other way around, so there isn’t a competition. All we ever argue is don’t pass us by.”

As of Sept. 30, TMX’s exchanges, which include the TSX and the TSX Venture Exchange, had 43 cannabis listings with a market value of $47 billion.