TSX Group Inc. reported a sharp increase rise in fourth-quarter profit on Wednesday, prompting the stock market operator to raise its dividend.

The solid results were due to stellar year on Canadian capital markets as the TSX-owned Toronto Stock Exchange enjoyed record volumes as its main index rose 20%.

TSX said net income for the quarter was $27.8 million, or 40¢ a share, up from $18.6 million, or 27¢ a share, a year ago.

Revenue for TSX, which also owns the TSX Venture Exchange and energy-trading platform Natural Gas Exchange, rose 20% to $76.3 million on stronger listing, trading and market data income.

The value of securities traded on the senior and junior equity exchanges during the quarter soared to $301.1 billion from $222 billion, while cash flow surged 75% to $52.5 million for the quarter, giving the company $276 million in cash and marketable securities.

“2005 was a great year for us and for the Canadian markets as a whole. This success is reflected in the new highs reached by the S&P/TSX Composite Index. Our results continue to reflect the growth of our core business including increases in the number of new listings, the increase in value of securities traded and the increased number of transactions on our equity exchanges. Natural Gas Exchange also achieved new records in energy trading during 2005,” said Richard Nesbitt, CEO of TSX Group, in a release.

TSX raised its quarterly dividend to 33¢ per share from 25¢ per share.

TSX Group shares finished the session at $52 on Wednesday.