Briefly:

( June 20, 2003) Canada’s financial watchdogs have released their proposed disclosure requirements, with the catchy name “National Instrument 51-102 Continuous Disclosure Obligations.”

Among guidelines for standard documents, like financial statements, the report proposes a new requirement for the reporting of material changes and significant business acquisitions.

“We have also taken this opportunity to bring our requirements up-to-date, to streamline or eliminate some requirements, and to address some information gaps in the old system,” said Stephen Sibold, chair of the Canadian Securities Administrators. “The public and industry comment on the original proposal has been thorough and very helpful.”

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Canadians use homes as “piggy banks”: CIBC

(June 20, 2003) Canadian homeowners are keeping the economy going by borrowing against the increased value of their residence, according to a report from CIBC. The report says the booming real estate market has added an average of $43,000 to homeowners’ net worth.

A record $22 billion has been borrowed against the home in Canada. The report suggests that homeowners may be using low interest home equity loans to pay off other, higher-interest debts like credit cards.

“But even more of the cash fueled increased spending — accounting for a quarter of retail sales growth in the year ending April 2003,” said Grigoris Karakoulas, vice-president of customer behaviour analytics for CIBC. “That’s been a much-needed supplement, given the disappointing 0.7% growth in real disposable income during the year ending March 2003.”

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Empire rolls out new life product, two new seg funds

(June 20, 2003) Empire Life Insurance is offering a new permanent life policy through advisors contracted to deal with the company, called Optimax III. The new product will replace Optimax II, offering several new features.

The company is also offering two new segregated funds; the International Equity Fund and Global Balanced will be added to Empire’s elite family of funds.

Empire is also streamlining paperwork for advisors selling its insurance policies by combining life and health insurance into a single application, starting June 23, 2003.

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Maritime Life offers new universal life policy

(June 19, 2003) Maritime Life has announced the creation of a new universal life product that will provide minimum-guaranteed returns. The new product will be called Essential Solutions.

“Essential Solutions is targeted to meet the needs of clients who need more than basic term life insurance and want to remove the investment risks that are associated with universal life products,” said Linda Li, manager of product marketing and support in Maritime Life’s retail marketing division.

The new policies will allow holders to convert to Maritime Life’s Universal Solutions at any time in the future.

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Quebec’s GLM joins Peak

(June 19, 2003) Quebec City-based GLM Group is forging closer ties with Peak Investment Services Inc., the privately owned financial services dealer for independent financial planners and investment and insurance advisors.

“Like Peak, we believe that the most viable alternative for a client is to work with independent planners who offer no in-house products,” said Alain Rioux, president of the GLM Group.

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Foreign investors still favour Canada

(June 18, 2003) The Canadian economy got a vote of confidence in April, as foreign investors poured $4.8 billion into Canadian securities, according to StatsCan. Investors remained cautious, however, with $3.7 billion ending up in bonds while only $400 million went into equities.

That’s the third month in a row that they’ve jumped on the Canadian bandwagon, having invested $13 billion in Canada’s bond market in February and March.

Canadian bonds have become quite attractive, as short-term interest rates are 206 basis points higher than comparable rates in the U.S.

Also in April, Canadian investors were pulling their money out of foreign equities, opting for foreign bonds instead. Canadians sold $600 million in equities, compared to the record-setting $2.2 billion in March.

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Young people anxious to buy homes

(June 18, 2003) Often dismissed as slackers only interested in immediate gratification, “Generation Y” has its eye set on homeownership, according to an Ipsos-Reid survey conducted for realty firm Century 21.

The survey finds that 18- to 26-year-olds are tired of paying rent and are prepared to take on the responsibility of owning their home.

“There’s no doubt that the low cost of loans is market driver,” says Century 21 Canada president Don Lawby. “It simply doesn’t make sense for people to rent if they can raise the deposit to buy a home of their own.

The survey also showed that “Gen Y” considered location to be more important than the square footage or the price of their home.

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Norshield offers scholarships for finance students

(June 18, 2003) Norshield Financial Group has announced a scholarship program that will award $5,000 to finance students at the University of Toronto, University of Western Ontario, HEC Montréal, Université du Québec à Montréal, McGill University and the John Molson School of Business at Concordia University.

“The students who receive these scholarships will have demonstrated a strong interest in finance, especially alternative investments,” said John Xanthoudakis, chair of Norshield Financial Group.

The annual scholarships will be offered beginning this upcoming academic year (2003-2004).

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SARS kills Legacy REIT’s distribution

(June 17, 2003) Legacy Hotels real estate investment trust (REIT) has announced that it will not pay its second-quarter distribution, due to the downturn in the hospitality industry caused by severe acute respiratory syndrome (SARS).

“With a debt to total asset ratio of approximately 40%, Legacy remains conservatively financed,” said Neil J. Labatte, Legacy’s president and CEO. “However, given the current operating environment, the board of trustees felt it was prudent to preserve Legacy’s financial resources.”

Legacy paid a first-quarter distribution of 18.5 cents per unit.

The SARS outbreak in Toronto has put a damper on tourism across the country, compounding problems for an industry already suffering from terrorism fears.

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Transamerica teams with AEGON to offer five new GIFs

(June 17, 2003) Transamerica Life Canada has announced the creation of five new guaranteed investment funds (GIFs) under the imaxx brand, pending regulatory approval.

The new funds will be managed by AEGON Fund Management with Transamerica providing the guarantees.

“While investor sensitivity will likely persist in the mid-term, investors and their advisors continue to turn to alternative investments like GIFs,” said Mark Jackson, chief investment officer at AEGON Capital Management.

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Six million Canadians banking online

(June 16, 2003) More than 20% of Canadians and over 30% of all Internet users in the country are banking online, according to an extensive consumer survey released today. About 6.4 million people banked online in the month of April, concludes the study, conducted by Faulkner Consulting and comScore Media Metrix.

RBC Financial Group led online bankers, with a 30% market share, followed by TD Canada Trust and Desjardins.

The study also found that 8.35 million Canadians visited a bank Web site in April, meaning that 25% of Web site visitors are not banking online. “This suggests not all banks are gaining appropriate returns on their investment in content and functionality,” the study states.

The survey, called “Behind The Firewall,” claims to be the first in Canada to use consumer panel based data, involving more than 12,000 participants.

In a separate report released today, the federal government said that Canadians are world leaders in Internet usage, spending an average of nine hours a week online. About nine million income tax returns were filed electronically last year.

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(06/16/03)