Briefly:

(December 24, 2003) In the spirit of the season, CIBC senior economist Avery Shenfeld is showing off his creative side, penning a financial version of the classic Christmas poem, “Twas The Night Before Christmas.”

Twas the night before Christmas And all through the House Not an MP was stirring Nor a new same-sex spouse

Paul Martin was settled His supporters rewarded Dreaming of budgets and What could be afforded

While a premier with budgets still deep in the red Saw visions of health transfers dance in his head

When out there on Bay Street, there arose such a clatter I arose from my bed to see what was the matter. A long lonely call came from up near the moon And it seemed to be coming from a shiny gold loon.

Now Euro, Now Yen Now Aussie and Swissie On Kroner, On Krona And even on Kiwi

To the top of the chart To the top of the wall Dash away dash away Dash away all!

And the Canadian loonie Took them up to the sky And showed all those currencies Just how they could fly

But left on the ground were Canadian exports As now-overpriced goods left them out of such sports

And then in a twinkling, came a tall jaunty fellow Whose voice was all gravelly, but plans much more mellow The stump of a pipe he held tight in his teeth And the smoke it encircled his head like a wreath

Saint Dodge, as they called him, brought with him a gift That he gave to us all when we needed a lift But while he saw the loon’s flight with a bit of alarm He felt we could get through without too much harm

A wink of his eye and a nod of his head Soon let us all know we had nothing to dread And so when the loon got too far from the pack He reached in and pulled a rate cut from his sack

He sprang to his car, the economy mended Since the loon heard his call and hereafter descended And I heard old Saint Dodge ‘ere he drove out of sight “Merry Christmas to All and to All a Good Night”

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Morningstar to separate mutual fund, seg fund reporting

(December 23, 2003) Fund researcher Morningstar is introducing separate rating systems for mutual funds and segregated funds, beginning in the New Year.

Morningstar says it gave advance notice of its intentions at the Canadian Investment Funds Standards Committee (IFSC) November meeting, and no objections were raised to the idea. Rankings and ratings for the mutual fund and seg fund categories will continue to be based on the standard IFSC categories.

“The change will be implemented in order to adhere to the principle of only comparing funds of similar nature and intent to each other,” Morningstar says. “Morningstar is now extending that principle by recognizing in its analytics the distinction between mutual funds and segregated funds.”

Having separate universes will enable at-a-glance comparisons of the median returns and management expense ratios of seg fund categories with those of the corresponding mutual fund category, says Morningstar contributing editor Rudy Luukko. “Investors who have access to these comparisons will be better equipped to make an informed decision as to which route to take.”

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Raymond James releases top stock picks for 2004

(December 23, 2003) Analysts at investment dealer Raymond James have released their annual list of stocks they expect to produce superior results in 2004.

This year’s list includes CI Fund Management, Davis & Henderson Income Fund, Intrawest, Magellan Aerospace, Petro Canada, Royal Group Technologies and Talisman Energy.

“Our analysts are confident that the fundamentals of these firms are sound and should produce enhanced value for investors in 2004,” says Darren Martin, director of Raymond James’ Canadian equity research team.

Last year’s list of top stocks averaged an 11.6% return, compared to nearly 23% for the benchmark S&P/TSX Composite Index.

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U.S. to lead economic revival, says Scotiabank

(December 22, 2003) The world’s major industrialized nations — paced by the U.S. — will enjoy strong economic growth in 2004, according to Scotiabank forecasters.

The U.S. economy could expand by as much as 4.5% in 2004, says Scotiabank chief economist Warren Jestin. Canada will fall into the runner-up position for the first time in five years, trailing the U.S. by at least one percentage point, he adds.

Inflation across North America should remain little changed in 2004, Jestin predicts, and the Canadian dollar could hit 80 cents US in the coming months, creating “strong headwinds” for Canadian exporters.

Both Europe’s and Asia’s economies will also expand in 2004, though the numbers will be muted compared to North America, Jestin says, with the notable exception of China, whose economy is expected to grow by 8% annually through 2005.

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Franklin Templeton adds pair of income funds

(December 22, 2003) Franklin Templeton Investments today announced the launch of two new mutual funds: the Bissett Income Trust and Dividend Fund and the Bissett Canadian Short-Term Bond Fund.

The new funds are designed to meet the growing demand among Canadian investors for income-producing investments, Franklin Templeton said in a statement.

The Bissett Income Trust and Dividend Fund has a target asset mix of 60% income trusts and 40% dividend-paying equities.

“There are many interesting opportunities in the Canadian income trust market,” says Leslie Lundquist, who will manage the income trust portion of the fund. “The key is to take a bottom-up, conservative approach and find the income trusts that will provide stable and growing distributions over time.”

The Bissett Canadian Short-Term Bond Fund is aimed at conservative investors, focusing on fixed income securities with terms to maturity of less than five years.

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CIBC settles with U.S. regulator over Enron allegations

(December 22, 2003) CIBC has agreed to pay $80 million US in penalties to U.S. regulators in a settlement related to the Enron scandal.

The U.S. Securities and Exchange Commission (SEC) charged CIBC and three executives with helping Enron “mislead its investors through a series of complex structured finance transactions.”

“Today’s action demonstrates that neither financial institutions nor their executives can hide behind the technical complexities of structured transactions to avoid responsibility for contributing to fraudulent accounting and manipulated financial results,” said the SEC’s Steve Cutler.

Two of the CIBC executives charged by the SEC have agreed to pay fines of nearly $600,000 US while the third is contesting the charges.

CIBC president John Hunkin said he was pleased the investigation was now closed and noted that the bank has already made changes to enhance its corporate governance measures and internal controls.

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(12/22/03)