Briefly:

(March 19, 2004) Trusteed pension funds recorded a second consecutive quarter of positive cash flow in the third quarter of 2003, according to StatsCan. The report says this improvement shows such pensions to be “well on the road to recovery.”

Total assets in these funds hit a high of $614.4 billion during the quarter, but finished at $584.2 billion, up 3.1% from Q2. Cash flow was positive by $4.4 billion, on revenues of $14.2 billion and expenditures of $9.8 billion.

Stronger stock markets have allowed the funds to realize better gains from the sale of holdings, and employer contributions have increased to $4.5 billion. The largest loss in the history of the survey was $6.5 billion in the third quarter of 2002.

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Blumont closes Series 2 Note sale

(March 19, 2004) BluMont Capital Corporation has raised $52.1 million on sales of BluMont Man Multi-Strategy Series 2 Notes. The offering of these multi-manager, multi-strategy products, with a principal guarantee by Citibank Canada, closed March 18.

“We are extremely pleased with the success of the Series 2 Notes offering and the continued demand for BluMont Man structured products,” said Toreigh Stuart, CEO of BluMont Capital. “It is our intention to deliver similar types of products to the retail market on a regular basis.”

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Foreign investors prefer bonds

(March 18, 2004) Foreign investors bought $5.5 billion in Canadian securities in January, preferring bonds over equities, according to StatsCan figures released this morning. It was the largest bond shopping spree in 10 months, with $4.5 billion invested, after December’s sell-off of $1.6 billion.

Foreigners preferred existing government bonds and returned to Canadian dollar-denominated issues, which were out of favour in the latter half of 2003 due to the soaring loonie. They also sold off $1.4 billion in Canadian money market paper.

Canadians sold off foreign equities after stocking up over the past three months, but continued to buy bonds. The stock sell-off totalled $855 million, with bond investment of $271 million.

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CGAs call for fiscal “prudence”

(March 18, 2004) The Certified General Accountants Association of Canada (CGA-Canada) has released its wish list for the upcoming federal budget, calling for “continued fiscal prudence and tax improvements.”

“Our fear is that spring election pressures may open the gates to a spending spree,” says Anthony Ariganello, CGA-Canada president and CEO. “While it may be politically tempting, this government must focus on reduced expenditures while setting specific debt reduction targets.”

Specifically, the association wants the restoration of the billion-dollar “prudence” reserve and an enhanced education tax credit.

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Loring Ward releases 2003 earnings

(March 18, 2004) Advisors to the rich and famous, Loring Ward International has announced year-end financial results for the first time since it was spun off from Assante in November.

“The results show we are starting out on a very positive note,” said Martin Weinberg, president and CEO of Loring Ward International Ltd. “During the past 120 days we’ve been busy laying the new foundation for the future. We’re pleased to see our efforts matched by momentum in our financial performance.”

The company was hit by several one-time fees and costs, resulting in a net loss for the year of $6.8 million US, compared to a loss of $9.1 million US in 2002. On a positive note, the firm says client assets under management reached $2.2 billion US.

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HSBC buys Intesa Canada

(March 17, 2004) HSBC Bank of Canada is acquiring Italian-owned Intesa Bank of Canada, pending regulatory approval. Intesa has 11 branches in Canada, mostly in the greater Toronto area, and $1.1 billion in total assets.

“The acquisition of Intesa Bank Canada will increase our presence in central Canada and strengthen our position as an alternative to the big domestic banks,” says Lindsay Gordon, president and CEO of HSBC Bank Canada.

The deal is scheduled to close on May 31.

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IDA issues lifetime ban

(March 17, 2004) The Ontario District Council of the Investment Dealers Association of Canada has issued a lifetime ban and levied a fine of $120,000 against David Cathcart.

While working as a representative at Northern Securities and with Rampart Securities, the IDA says Cathcart conducted unauthorized trades in three clients accounts and accepted compensation from a client without disclosure to his employer.

On top of the $120,000 fine, Cathcart must also pay $50,000 in costs.

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CSA names first secretary general

(March 16, 2004) The Canadian Securities Administrators (CSA) has announced the appointment of Ann Leduc as its first secretary general. Leduc will be responsible for the general management and supervision of CSA Secretariat operations and for coordinating the execution of the CSA strategic plan and objectives.

“With the appointment of the new secretary general and the establishment of a more formal governance structure, the CSA will be better able to effectively harmonize legislation across all Canadian jurisdictions while maintaining decision-making authority within each province or territory,” says Stephen Sibold, chair of the CSA.

Leduc spent the last five years as a regulation analyst and regulation manager for the Commission des valeurs mobileères du Québec (CVMQ), now Québec’s Autorité des marchés financiers.

The CSA announced the creation of a permanent secretariat in Montreal last fall.

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Fed stands pat on rates

(March 16, 2004) The U.S. Federal Reserve surprised no-one today when it announced its benchmark interest rate would remain at 1%, a 45-year low. Of more interest to the markets were the comments the Fed made regarding future rate decisions.

The Fed’s open market committee reported it would remain “patient” on rate hikes, saying it did not see any new threat from inflation, but it was more concerned about the lack of job growth in the U.S.

“Although job losses have slowed, new hiring has lagged,” the FOMC report said. “Increases in core consumer prices are muted and expected to remain low.”

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Manulife announces fund mergers

(March 16, 2004) Manulife Mutual Funds has proposed the merger of several funds, combining some of its Elliott & Page branded funds and folding others into the MIX fund family. The mergers must still be approved by unitholders at a meeting scheduled for May 7, 2004.

“We are making these changes as part of our ongoing efforts to provide a strong yet streamlined family of investment funds. By merging similar funds, Manulife Mutual Funds will be in a position to generate greater operating efficiencies and achieve greater economies of scale,” said Eric Grove, vice president, investment funds, Manulife Financial.

Aside from the mergers, unitholders of the Elliott & Page RSP Total Equity Fund will be asked to approve changes to the fund’s investment objective, which would link its performance to the MIX SEAMARK Total Global Equity Class.

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Co-operators closes travel insurance deal

(March 15, 2004) Co-operators Life Insurance today announced regulatory approval for its acquisition of travel insurance firm Trent Health Group. Financial details were not released.

“The acquisition will expand our product offerings and allow us to provide a greater number of travel insurance options to consumers,” said Ruth Simons, vice-president of Travel Insurance at Co-operators Life and president of Travel Insurance Coordinators, also owned by the Co-operators.

Simons will lead the Co-operators integrated travel insurance operation, the Guelph, Ontario based firm also announced.

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IDA hits former broker with $150,000 fine

(March 15, 2004) A former Dundee Securities broker based in Moncton, New Brunswick has been fined $150,000 by the IDA and permanently banned from the securities industry.

In a settlement agreement, Dosithe Charles Richard admitted to misappropriating $82,000 in client funds and using some of the money to compensate client losses.

Richard, who has not been employed in the industry for more than two years, was also ordered to pay $15,000 in investigation costs.

The IDA released two other disciplinary decisions today. Keith Court Anderson of Canaccord Capital in Vancouver was fined $25,000 for forging his wife’s name on cheques and other financial documents.

The brokerage industry association also dropped charges against Tumer Bahcheli of Yorkton Securities in Calgary. Bahcheli was accused of compensating a client for losses in an account, but a disciplinary panel ruled that the evidence did not meet the level of proof required to sustain a charge.

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(03/15/04)