Briefly:

(March 5, 2004) Standard Life Mutual Funds is reiterating its decision to close only the deferred sales charge option of its Natural Resource, Global Science and Technology, and Global Balanced RSP funds, which were closed to new purchases on March 2, 2004.

These funds will be terminated completely on or about May 21, 2004.

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GGOF caps Monthly Dividend Fund

(March 5, 2004) GGOF Guardian Group of Funds will close its Monthly Dividend Fund to new investors on March 12, after reaching about $440 million in assets.

“Should sales continue at this pace, our portfolio advisor’s ability to maintain the desired portfolio may be challenged,” said Gavin Graham, vice-president and director of investments at GGOF. “The capping is also the result of an increasing shortage of high-quality, exchangeable, retractable preferred shares.”

Current fund-holders will be able to continue investing in the fund.

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Feds may allow “puts” in RRSPs

(March 4, 2004) The Montreal Exchange is applauding the Department of Finance for considering the inclusion of put options for RRSP eligibility. At present, only call options have been allowed in an RRSP.

“By broadening the definition of ‘qualified investment,’ the Department of Finance Canada expands the range of strategies aimed at protecting and enhancing the performance of equity portfolios held by investors in their RRSP,” read a press release from the exchange. “Investors will be able, through the use of put options, to purchase an ‘insurance policy’ to manage the risk associated with their equity investments held in an RRSP.”

The Finance Department’s proposed amendment would also make put options eligible for inclusion in RRIFs, RESPs and deferred profit sharing plans (DPSPs).

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Northwest to seek Maestral synergies

(March 4, 2004) Northwest Mutual Funds is planning an overhaul of its product line, which will see the integration of Maestral Funds and changes in the management of some funds.

Since being taken over by Desjardins Trust in October 2003, Northwest has been responsible for the marketing of Maestral. The restructuring will see Northwest become the manager for that line, with Northwest Asset Management Inc. becoming portfolio advisor of the Maestral Funds.

To simplify the product line, Northwest hopes to merge similar funds, such as the two brands’ money market funds, under the Northwest brand name. For the most part, the funds are duplicates.

Aside from the mergers, Northwest will also harmonize Maestral’s year-end and auditor to match its own.

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McMaster hires new business school dean

(March 4, 2004) McMaster University has hired Paul Bates to head up its DeGroote School of Business. Bates is a Bay Street veteran with a career in investment dealing and wealth management.

“Our new business dean will help us to continue our efforts in fostering superior research, relevance and creativity, building on McMaster’s earned reputation of innovation and discovery,” said McMaster University president Peter George.

Bates is also a commissioner of the Ontario Securities Commission and a part-time faculty member of the Rotman School of Management at the University of Toronto.

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AIMR launches ad calling for single securities regulator

(March 3, 2004) The promoters of the chartered financial analyst (CFA) designation have teamed up with six other industry associations to push for a single Canadian securities regulator. The Association for Investment Management and Research (AIMR) took out advertisements in today’s Globe and Mail and National Post.

“As the findings of the wise persons’ committee clearly demonstrate, Canadian investors and investment professionals want a regulatory framework modeled for the future, not rooted in the past,” AIMR says, pointing to its own study which showed strong support among CFAs for a single regulator.

“The importance of this issue to Canada’s financial markets, economy and long-term competitiveness should not be underestimated,” said David Yu, CFA, co-chair of AIMR’s Canadian advocacy committee. “That is why these leading organizations have come together to speak with a united voice on this issue. We urge our policymakers to heed the call for a single regulator and adopt the key recommendations of the wise persons’ committee. The time for action is now.”

The ad is co-signed by the Canadian Bankers Association, the Canadian Chamber of Commerce, the Canadian Council of Chief Executives, the Investment Counsel Association of Canada, the Pension Investment Association of Canada and the Treasury Management Association of Canada.

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C.D. Howe pushes for lower business taxes

(March 3, 2004) The C.D. Howe Institute says Ottawa and the provinces must reduce corporate tax levels, arguing that the current high rates are undermining Canada’s economic potential.

In a report released today, C.D. Howe says the average effective tax rate for Canadian businesses has fallen slightly to 31.5% from 31.8% last year. However, that’s still substantially higher than the U.S. average of 20.1%, the economic think-tank says.

Ottawa has announced plans to eliminate the federal capital tax by 2008. But even with that change and other provincial initiatives, Canada’s effective tax rate on capital will still be four percentage points higher than the U.S. in 2008, the institute projects.

C.D. Howe estimates that Canada’s capital stock will increase by $22 billion if the effective tax rate falls by just one percentage point.

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Future bright for B.C. economy, IDA says

(March 3, 2004) For the first time in eight years, B.C.’s economic growth will match the national average, says the IDA in a report released today on the province’s economic outlook.

“Exports will be a driving force this year, but recent initiatives to lower taxes and reduce costs through streamlining administrative functions are having a positive impact in improving business confidence,” says IDA president Joe Oliver.

Energy, high tech and tourism industries will contribute to an expected 3% economic growth rate in 2004, the brokerage industry association says. However, B.C.’s forestry and mining sectors will continue to face challenges, the report cautions.

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Scotia posts record profit

(March 2, 2004) Scotiabank has reported record first quarter net income of $704 million, up 18.4% from $595 million for the same quarter last year.

“Our first-quarter results continue to reflect the diversity and strength of our businesses,” said Rick Waugh, president and CEO. “This led to the bank exceeding the higher performance targets established for 2004.”

The bank also announced a plan which would effectively split the stock on a two-for-one basis, issuing a dividend of one share paid on each common share. The bank said it would ascribe no monetary value to the dividend, as it should dilute share value by the same ratio, making it non-taxable in the hands of the shareholders.

“This share split will make the bank’s common shares more affordable for the average investor, which will promote increased interest in the shares and broader share ownership which we anticipate will prove beneficial to existing shareholders,” said Bob Brooks, senior executive vice-president.

The effect of the dividend is expected to be reflected in share values as of April 2, 2004 on the Toronto Stock Exchange and April 29, 2004 in New York. Scotia’s last stock split was in 1998.

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CWB buys HSBC Canadian Direct Insurance

(March 2, 2004) Canadian Western Bank has announced it plans to acquire HSBC Canadian Direct Insurance Incorporated (Canadian Direct) for a cash payment of $25.4 million.

“Canadian Direct registers a very high level of customer satisfaction and its people are of exceptional quality, making it an ideal fit with our “Think Western” brand and culture,” said Larry Pollock, president and CEO of Canadian Western Bank. “We believe the potential for this company is excellent and we are very pleased to be adding another dimension to our financial services.

The deal is expected to close in four to six weeks. The price incorporates a 25% premium over book value and Canadian Western Bank expects the acquisition to be immediately accretive to earnings.

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Alberta, N.B. to enforce MFDA commission payment rule

(March 1, 2004) Two provinces say they will not go along with the MFDA’s move to temporarily allow the payment of mutual fund commissions to personal corporations.

Last month, the MFDA board voted in favour of the further suspension of rule 2.4.1 until the end of 2006. The rule requires that all commission be paid by fund dealers directly to sales representatives.

Other jurisdictions, including Ontario, British Columbia, Saskatchewan and Nova Scotia, have agreed to the extension as securities regulators work with industry to resolve the issue.

However, regulators in Alberta and New Brunswick have advised the MFDA that they will not allow firms operating in those provinces to rely on this transition period. “Accordingly, members must pay commissions directly to all salespersons registered in these jurisdictions,” the MFDA says.

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Maritime Life reports higher 2003 profits

(March 1, 2004) Halifax-based insurer Maritime Life says its profits for 2003 grew 48% to $91 million on revenues of $2.2 billion.

Maritime credited the equity market recovery and continued positive credit conditions for its profit boost, along with last year’s acquisition of Liberty Health.

Maritime will soon be swallowed up by Manulife Financial when Manulife’s takeover of Boston’s John Hancock Financial Services is approved by regulators.

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Standard Life closing three funds

(March 1, 2004) Standard Life Mutual Funds has announced it will terminate its natural resource, global science and technology and global balanced RSP funds.

“This decision is based on the fact that the fixed costs of the funds are being shared by a relatively small number of unitholders,” said Anthony Cardone, senior vice-president of marketing. “Our decision also reflects our goal of improving cost-efficiency for all funds under management.”

New sales of these funds will be closed March 2. Unitholders of the affected funds may switch to another Standard Life fund without cost before May 20, after which the fund units will be switched to the company’s money market fund.

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Altamira shuffles executive lineup

(March 1, 2004) Altamira has announced Anne-Marie Thomas has stepped down as chief investment officer of mutual funds at its sub-advisor, Natcan.

“[Thomas] made significant contributions to the advice, education and service that our clients received,” said Greg Reed, Altamira’s president and chief executive officer. “We thank her for her dedication to our clients, and we sincerely wish her great success in her future endeavours.”

The firm also announced that Ian Dillon has been appointed chief investment strategist.

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BMO replaces fund advisors

(March 1, 2004) BMO Investments has announced the appointment of three new investment advisors, effective today. Capital Guardian Trust Company will replace The Putnam Advisory Company on the BMO International Equity Fund.

Martin Currie of Scotland, will replace the JP Morgan Fleming Asset Management Group as the investment advisor for the BMO Japanese Fund. Alliance Bernstein Institutional Investment Management will replace the JP Morgan Fleming Asset Management Group as the investment advisor for the BMO Emerging Markets Fund.

“After a thorough review and selection process, we chose these firms to join our portfolio management team because each investment manager has a demonstrated investment process with an established track record,” said BMO president Ed Legzdins.

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(03/01/04)