Briefly:

(October 8, 2004) The Standard Life Assurance Company has named Jordy Chilcott senior vice-president of sales for Standard Life Mutual Funds and vice-president of sales at Standard Life.

“I will continue to search for innovative ways to help our advisor partners to manage and grow their business in addition to our Business Consultancy Services,” said Chilcott. “We believe that in today’s highly competitive marketplace, we need to offer high quality fundamentals of product, performance and service, and I intend to ensure that we are perceived by our clients and the advisor community as innovative leaders who can cater to their needs.”

Chilcott joined Standard Life Mutual Funds in August 2000 as vice-president for Western Canada, providing business consultancy services to independent advisors and supporting the advisor community as their business expanded.

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ING to acquire Allianz of Canada

(October 8, 2004) ING Canada has sealed a deal to purchase Allianz Group’s property and casualty (P&C) insurance operations in Canada, including subsidiaries Trafalgar Insurance Company of Canada and Canada Brokerlink.

“The acquisition allows us to continue expanding our activities within the P&C insurance industry, especially in Ontario and Alberta,” said Claude Dussault, president and CEO of ING Canada. “As we increase the scale of our activities, we will also be in a better position, in collaboration with our distribution partners, to improve our offering of innovative solutions to consumers.”

The deal boosts ING’s gross written premiums in Canada by approximately Cdn $600 million to reach more than Cdn $4 billion. Allianz will retain its Canadian industrial lines business, which is part of Allianz Global Risks.

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CI reports strong quarterly profits

(October 7, 2004) Acquisitions and solid markets helped CI Mutual Funds nearly double its profits in the latest quarter. Net income in the three months ending August 31 reached $81 million, up from $43.5 million during the same period last year.

Total fee-earning assets in the quarter were close to $64 billion, up from $35.4 billion last year. CI’s recent acquisitions include Assante, IQON, Synergy and Skylon.

Net sales in the quarter were $105.4 million, compared to net redemptions of $30.7 million in 2003.

In its statement, CI noted that it had been asked by the Ontario Securities Commission to provide information on market timing on certain accounts, which could lead to enforcement proceedings. But the firm added that it is unable to measure the impact of the investigation on CI’s financial position until the probe is complete.

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Oil prices could slow economic growth, CIBC says

(October 7, 2004) Oil prices will likely remain above $50 a barrel for the next three quarters, dampening economic growth in North America, says CIBC World markets.

“As the world’s largest importer of crude, all of a sudden prospects for the once hot U.S. economy don’t look so hot anymore,” says CIBC World Markets chief economist Jeff Rubin.

Soaring energy prices could also lead to an “early and abrupt” end to the long-anticipated rise in interest rates, the report adds.

Although higher energy prices will be a significant drag on growth in Central Canada, it will create a “revenue bonanza” for Alberta, CIBC says, which could see provincial oil and gas royalties double over the next year.

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Swift Trade shuts down day trading operations

(October 7, 2004) Swift Trade Securities has closed its Canadian operations. A notice posted on the IDA Web site says the company has been transferred to inactive status.

The day trading company saw huge success during the Nasdaq tech boom of 2000, but fell on hard times when regulatory changes decimalized the stock markets, decreasing the spread between bid and ask prices on individual stocks.

“Day trading was dealt a death blow,” the company said in a statement on its Web site. “Clients left in droves, no longer able to make even a fraction of the profits they once had. Today, only the hardiest and shrewdest day traders survive.”

Swift Trade will continue offering proprietary trading, where people are employed to trade on single corporate accounts.

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Resolute closes fund to new investors

(October 7, 2004) Resolute Funds is closing the Resolute Growth Fund to new investors. In a statement today, the company noted that its initial prospectus stated that the fund would be closed when assets reached $200 million.

The net asset value of the growth fund reached $213.6 million yesterday, despite an effort by the firm earlier this month to slow demand by no longer accepting orders purchased on a front-end load basis.

“As a result of the continuing growth of the fund and the influx of new purchase orders, the manager believes that it is in the interests of current unitholders to close the fund entirely to new investors on October 22, until further notice,” Resolute said.

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State Street and Innovest launch new environmental fund

(October 7, 2004) State Street Global Advisors and sustainable research firm Innovest have teamed up on a new investment strategy aimed at the institutional market. The U.S. Core Environmental fund will focus on U.S. large-cap equities.

“We are seeing a rapidly growing appetite among institutional investors, both in the United States and elsewhere, for new investment products which can combine strong financial performance, state-of-the-art fiduciary leadership, and concern for major environmental issues such as climate change,” said State Street CIO Alan Brown.

Testing has confirmed that Innovest’s “environmental alpha” overlay, combined with State Street’s investment models, create attractive returns, the companies said in a release.

“There are strong early indications that this new product will find ready acceptance, especially among public funds, endowments and foundations, both in the U.S. and internationally,” said Innovest CEO Matthew Kiernan.

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VenGrowth capping fund, launching replacement

(October 6, 2004) VenGrowth has announced it will soon cap its VenGrowth II Investment Fund, which is Canada’s largest national labour-sponsored investment fund (LSIF) with net assets topping $489.5 million and over 100,000 investors. The fund will be capped as of November 19, 2004.

The firm is now launching VenGrowth III Investment Fund Inc., which will invest across Canadian private business sectors including technology, traditional industries and life sciences.

“The VenGrowth III Fund will leverage all of the expertise that exists within our 26-person investment team, providing exposure to a broad spectrum of private equity investments in a single fund,” said David Ferguson, managing general partner of VenGrowth. “With unparalleled diversification and up to 30% in immediate tax credits, we believe that VenGrowth III provides a powerful alternative investment option for Canadian investors this RRSP season.”

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BMO rolls out six new funds

(October 6, 2004) BMO Investments is launching six new mutual funds, including two new income funds and four tax advantage funds, which will be available October 12, 2004. BMO is also rolling out a US dollar denominated version of its BMO U.S. Value Fund.

The new funds are: BMO Global Monthly Income Fund; BMO U.S. Dollar Monthly Income Fund; BMO Canadian Equity Class; BMO U.S. Equity Class; BMO Dividend Class; and BMO Greater China Class.

“We took great care to ensure we matched this new line-up of mutual funds with outstanding firms that demonstrated strong track records and consistent results,” said Ed Legzdins, President and CEO, BMO Investments Inc.

The income funds will be managed by UBS Global Asset Management (Canada) Co., while the China fund will be managed by Martin Currie Inc. The Canadian Equity Class and Dividend Class will be managed by Jones Heward Investment Counsel’s chief investment officer, Michael Stanley, while the U.S. Equity Class will be managed by John Leonard, head of North American equities for UBS Global Asset Management (Canada) Co.

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Soaring trusts fuelled by oil

(October 6, 2004) Soaring oil prices have benefited energy-based income trusts, according to CIBC World Markets. As a result, the research firm is reporting a boost of 5.38% in their entire income trust composite index for September, a growth rate far outstripping traditional common equities.

Within the composite index, the energy sector rose 9.75%, but even the poorest performance, turned in by REITs, was still positive at 2.22%.

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Bond markets to keep regular hours on November 10

(October 6, 2004) The IDA has reversed course on closing bond markets early ahead of Remembrance Day, following the lead of the U.S. Federal Open Market Committee, which is releasing a statement on November 10 in the afternoon.

The IDA had earlier recommended a 1:00 p.m. closing for Canadian fixed income markets, but says “market participants have indicated a preference for normal working hours on that date.”

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CPPIB teams up with RioCan

(October 6, 2004) RioCan Real Estate Investment Trust and the Canada Pension Plan Investment Board (CPPIB) have formed a strategic alliance to purchase regional power centres in Canada.

“This type of property has come to be recognized within the retail real estate industry as having strong growth potential for the future,” said Edward Sonshine, president and CEO of RioCan. “RioCan recognized this potential early in the development of this format and is pleased to have the opportunity of acquiring additional regional power centres together with CPP Investment Board.”

The properties will be held equally by the two investors as core, long-term holdings. Riocan will provide property management, asset management, leasing, development, and construction management services.

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Investor Ed teams up with Western

(October 5, 2004) The Investor Education Fund has partnered with the University of Western Ontario to give Ontario teachers the educational resources to teach youth about investing and money management.

The Investor Education Fund will work with Western’s Faculty of Education to help them enhance their online Additional Qualification (AQ) teacher courses.

“Western is integrating our content into their current online courses for teachers, increasing the number of teachers and students who have access to our content,” says Terri Williams, president, Investor Education Fund. “The goal in the end is to increase the number of students who understand and retain practical money management skills.”

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Pension giants invest in Europe

(October 5, 2004) Two of Canada’s largest pension funds have teamed up to pump $1.2 billion into starting a European Mezzanine Fund, which will be the largest independent fund of its kind on that continent.

The private equity branches of Ontario Teachers’ Pension Plan and the Caisse de dépôt et placement du Québec are launching Park Square Capital Partners LP.

“As a founding financial partner, we were able to attract and back the industry’s top management team, headed by Robin Doumar,” said Jim Leech, senior vice-president, Teachers’ Private Capital. “We are very excited about the advantages Park Square offers, both to us as investors in Europe and to its clients.”

The fund’s investment strategy involves substantial investments in subordinated capital of European leveraged transactions for private equity firms, corporations and underwriting banks. With 1 billion euros at its disposal, it can underwrite single transactions of up to 200 million euros and, with partners, can invest in larger transactions.

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Bank mergers have strengthened U.S. financial system, says Fed boss

(October 5, 2004) Consolidation in the U.S. banking industry has enabled firms to became more geographically diverse and manage multiple business lines, says U.S. Federal Reserve Chair Alan Greenspan.

“Some of the consolidation of the past decade would not have been possible if the Congress, led by the states, had not removed prohibitions on interstate banking and branching,” Greenspan said in a speech today, adding that consolidation, along with technology, has “greatly strengthened the stability of our financial system.”

Greenspan noted that about 2,400 U.S. banking organizations have been absorbed by other banking entities since 1995 and said that the 10 largest banks in the U.S. will soon account for about 51% of all American banking assets.

Bank mergers are not currently permitted in Canada, although Federal Finance Minister Ralph Goodale has promised to release a position paper on the issue.

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Home value fuels net worth growth

(October 4, 2004) Canadian homeowners have enjoyed explosive growth in the value of their homes, which have risen an average of 27% since mid-2001, according to research from Scotia Economics. As a result, household net worth has also risen, soaring 17%, to an average of $136,500 per capita, over the same period.

“Rising home ownership rates, combined with appreciating home prices, have been the dominant driver of Canadian household wealth gains over the past three years,” says Adrienne Warren, senior economist at Scotia Economics.

Because consumers see gains made through real estate as more permanent than other investment gains, the boost in net worth has fuelled spending on big ticket items.

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Online banking booming

(October 4, 2004) Canadians are embracing online banking in ever-increasing numbers, a survey released today suggests. In the month of August, 11.8 million Canadians, or 64% of all Internet users, conducted a banking transaction online, says comScore Media Metrix Canada.

That’s a 36% increase over the last 15 months, the company says.

“The days of standing in line at your financial institutions to complete a simple banking transaction are over,” says comScore Media Metrix Canada president Brent Bernie. “The Internet has revolutionized the way that Canadians bank and access their financial information.”

All banks are benefiting from the online boom, led by HSBC, which reported an 88% increase in Internet use from last year, ING, up 55%, PC Financial, which reported a 44% gain and RBC Financial, which led the big five banks with a 34% rise.

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Canada Savings Bond details released

(October 4, 2004) The federal government has announced the details for this fall’s offering of Canada Savings Bonds, which will be available from today through November 1.

CSB Series 90, with an issue date of November 1, 2004 and a 10-year term to maturity, will carry an interest rate of 1.35% for the first year. This rate may be increased if market conditions warrant, but bondholders will not earn less than this guaranteed rate during the first year of the bond.

Canada Premium Bond (CPB) Series 40, with an issue date of November 1, 2004, will carry an interest rate of 1.7% for the first year, rising to 3.2% for the third year.

The future of savings bonds was questioned recently when a government-commissioned study suggested the program should be scrapped, noting that investors can get better rates in a high-interest savings account. Federal Finance Minister Ralph Goodale says the program will continue, but has promised further study.

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Jovian unit offers advice to lawyers

(October 4, 2004) Jovian Capital has announced its subsidiary T.E. Financial Consultants has landed the contract to offer financial planning and wealth management services to all members of the legal profession in Canada through CBA Financial Services Corporation.

“We are delighted to have been selected to provide these services and we look forward to working with members of the legal profession, their families and employees across Canada,” said Timothy Egan, T.E. Financial Consultants founder and chairman. “CBAF is responding to the Canadian Bar Association’s members’ needs as expressed in Ipsos-Reid surveys conducted on behalf of the association’s members. Our fee-only objectivity puts us in a unique position to address the financial planning needs of the legal profession.”

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NASAA appoints new president

(October 4, 2004) Franklin Widmann, head of New Jersey’s Securities Bureau, is the new president of the North American Securities Administrators Association. Widmann was appointed to a one-year term at NASAA’s annual conference last week in Arizona. He succeeds Ralph Lambiase.

In a speech at the conference, Widmann called upon regulators and the securities industry to continue to work together to restore market integrity. “We must focus our priorities to help investors regain confidence in our financial markets,” he said. “Together, we must honour our responsibilities to ensure that all investors are treated fairly.”

NASAA’s membership consist of securities administrators in 50 U.S. states, as well as in Canada, Mexico and Puerto Rico.

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Russian banker questions gold trade

(October 4, 2004) Another voice has joined the debate over whether or not the price of gold is artificially manipulated. Citing research by the Gold Anti-Trust Action Committee (GATA), Oleg Mozhaiskov, deputy chair of the Bank of Russia, called the pricing of gold “so enigmatic” that the gold market may be less than free.

In a press release from GATA, Mozhaiskov is quoted as denouncing “the blatant lack of discipline” of U.S. fiscal policy and “the social and economic injustice of a world order that allows the richest country in the world to live in debt, undermining the vital interests of other countries and peoples.”

The press release says the comments were made in June to the London Bullion Market Association, but were “suppressed” by the association.

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