Briefly:

(May 15, 2006) It’s a scenario that few have predicted, and may never happen, but what would it mean for investors if the Canadian dollar was level with the greenback?

That all depends on the underlying economic forces pushing up the loonie, according to UBS Investment Research.

Rising commodity prices, drive by solid global growth and a decline in the U.S. dollar have pushed the loonie to its recent lofty levels. If that continues, investors should remain overweight in resource stocks, UBS suggests, as the TSX would continue to outperform its U.S. counterparts.

But there are other ways the loonie might reach parity. The U.S. economy could slow down, keeping the greenback in the doldrums. “The Canadian dollars rises as a byproduct of U.S. dollar weakness, but commodity prices are mixed due to the weaker U.S. growth offsetting the boost from the lower U.S. dollar.” In this scenario, UBS says, investors should be underweight in resources and overweight in consumer stocks.

The loonie could also rise if the Bank of Canada keeps bumping up raising interest rates, while the Fed stays on hold, creating a decline in the U.S. dollar but keeping commodity prices high. “In this scenario, export volumes remain healthy, earnings get clipped on the currency translation, while the domestic side is crimped, but not drastically affected.”

UBS says the problem with all three scenarios is that no single sector would come out ahead. “The implication is that clients have two basic choices: pick your scenario and hope that it is right. If we were doing so, we would pick number two for the months immediately ahead.”

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TSX to launch real-time gold index

(May 15, 2006) Gold bugs rejoice. By the end of this year, investors will be able to track their investments live, on the S&P/TSX’s first real-time global gold index.

The new index was announced Monday at the New York Hard Assets Investment Conference. It will track key gold mining companies from around the world. Once launched, the TSX expects the index will be a leading global benchmark for gold portfolios that will pave the way for the creation of index-linked investment vehicles.

“The S&P/TSX Global Gold Index will be designed to be both investable and broadly representative of the investment opportunities available in the global gold marketplace,” Steve Rive, vice-president of Canadian Index Services at Standard & Poor’s said in a release.

More details and a list of issuers that will be included in the new index will be released by Standard & Poor’s by the end of 2006.

TSX Group is home to approximately 60% of the world’s public mining companies. This year there have been a total of 29 new mining listings on the exchanges. According to the TSX, these new listings, in aggregate, bring an additional $2.03 billion to the value of mining securities listed on TSX Group exchanges.

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CPP, ING team up on London real estate purchase

(May 15, 2006) The CPP Investment Board and ING Real Estate Investment Management U.K. have acquired two office buildings in London, England in a deal valued at nearly $745 million. The properties, both in London’s financial district, were owned by Deka Immobilien and will now be part of a joint CPP/ING venture known as the “The Capital (London) Fund.”

The fund was formed specifically for the ownership of the two properties. The CPPIB will have an 80% share and ING, a 20% interest.

“The CPP Investment Board has been expanding its international real estate portfolio, primarily through investments in the U.K. and Western Europe,” says Graeme Eadie, the CPPIB’s vice-president of real estate investments. “This represents our first joint-venture transaction in Europe and we are pleased to be acquiring these high-quality assets in partnership with ING Real Estate.”

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RBC Capital Markets names currency strategist

(May 15, 2006) A two-time Reuters “Economist of the Year” has been appointed as a senior foreign exchange strategist at RBC Capital Markets.

Matthew Strauss joins the investment banking arm of RBC from the York Regional Municipality where spent the past two years as a fixed income manager. Prior to that Strauss was a fixed income strategist for the ABSA Group in South Africa, where he was honoured by Reuters.

Reporting to Monica Fan, RBC Capital Markets’ Global Head of FX Strategy, Strauss will primarily cover the Canadian dollar and select Latin American currencies.

Strauss’ appointment follows RBC Capital Markets’ recent hiring of Sue Trinh as a senior Foreign Exchange Strategist in Asia.

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Ernst & Young releases new corporate tax guide

(May 15, 2006) As attention turns to corporate taxes, Ernst & Young has released a line-by-line guide to preparing 2005 corporate tax returns.

“The guide is organized to help tax professionals quickly find the information they need. This one-stop resource helps professionals prepare T2 forms efficiently, improving their productivity during the busy season,” says Gena Katz, tax executive director at Ernst & Young in a release.

This year’s guide includes a new detailed capital tax table comparing the application of provincial capital taxes and a CCA look-up table with more than 500 entries. The guide is available in both book and online versions. The book also comes with a bonus searchable reference CD containing all source guides and materials referenced in the 2005.

The online guide contains all material from the hardcopy, plus it provides electronic access to referenced documents, keyword and line-by-line search functionality and extended access to underlying legislative provisions and related documents.

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