Briefly:

Previous Brieflies this week: | MON | TUE | WED | THU | FRI |

(May 9, 2006) A warmer than usual winter helped consumers in the form of cheaper home heating costs. But those savings will likely be offset by higher natural gas costs, as the summer heat fuels demand for electricity, and bumps up the cost of natural gas, according to a report from CIBC World Markets.

Natural gas is now the most dominant source of growth in electric power generation, the report notes, adding that prices dropped to $7 during the mild winter.

“Another hot summer in 2006 will likely set a new record for both home cooling days and ‘scorchers’ — or days in the U.S. when maximum temperatures are way above normal,” says CIBC chief economist Jeff Rubin. “We expect that this will push North American electrical demand to new record highs this summer and in the process pull natural gas prices up to $10.”

Total electricity demand per American household rose 25% between 1992 and 2005, the report notes, boosted by a 45% increase in energy consumption for air conditioning. Nearly 80% of American households have air conditioning and two-thirds of those own the higher energy consuming central air systems, CIBC adds.

“These air conditioning systems are working increasingly harder due to rising summer temperatures and the rapid growth in the average home size, which is now 40% larger than in the 1970s.”

• • •

CPPIB adds to real estate holdings

(May 9, 2006) The CPP Investment Board is investing $100 million in Hamilton’s Centre Mall. Co-owner and operating partner Osmington will be leading the redevelopment plans for the shopping centre. Construction will begin this fall and will be completed in phases by 2008.

Centre Mall is one of five shopping centres owned by the CPPIB and Osmington and was one of the board’s first real estate investments.

“Real estate offers attractive risk-adjusted returns that are a good match for the inflation-indexed benefits provided by the CPP,” said Graeme Eadie, the board’s vice-president of real estate investments. “Shopping centres are a favourable investment as they help balance our Canadian real estate portfolio.”

The CPP fund’s real estate portfolio is now worth $4 billion, comprised mostly of retail and office commercial properties in cities across the country.

• • •

Dynamic reverses course on fund merger

(May 9, 2006) Goodman & Company, which runs the Dynamic mutual fund family, says it no longer intends to merge the DMP Canadian Dividend Class into the DMP Canadian Value Class.

The move was in anticipation of the DMP Canadian Dividend Class being subject to increased capital tax, the company said in a release. “Tax changes announced by the federal government last Tuesday, however, have created a more favourable situation for DMP Canadian Dividend Class in this regard.”

The merger was part of a major overhaul announced by Goodman last week, which included the termination of about a dozen funds.

• • •

Laurentian bank creates new institutional arm

(May 9, 2006) Laurentian Bank Securities has appointed Simon Lussier to head a new business unit specializing in institutional brokerage services in equities markets.

The new group will offer a complete range of services for institutional investors, such as research, sales, trading and investment banking, with a particular focus on small and medium-sized businesses, the company said in a statement.

“Under the leadership of Mr. Lussier, the new line of business will build on solid foundations. Thanks to the growth potential of this segment, we will diversify our revenue, while enhancing our offer of products and services,” said Michel Trudeau, president of Laurentian Bank Securities.

Lussier and his team will be based in Montreal, with support from the company’s Toronto office.

• • •

Briefly: “IDA suspends, fines broker” and more of Monday’s news snippets