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The global economic downturn and the stock market crash of 2008 have led Canadians to take a more conservative stance when it comes to their investments, according to a study by Scotiabank.

The survey found one in four had become more conservative, while 39% said they were paying closer attention to their investments. More than one-third of respondents over the age of 50 said they had pushed back the start of their planned retirement.

“Considering that equity markets worldwide are down significantly, it comes as no surprise that investors are paying close attention to their risk tolerance and how their portfolios are positioned to meet their long-term goals,” said Gareth Watson, director and senior equity advisor, ScotiaMcLeod. “In down markets, it’s natural for investors to become more conservative when surrounded by substantial volatility and uncertainty.”

Fifty-four per cent of respondents said they are now more likely to seek a second opinion on their investments — the theme of Scotia’s advertising these days — and 30% have already sought advice from a financial institution they do not normally deal with. Seventeen per cent said they followed the advice they received.

“Financial planning is a high priority for many Canadians,” says Watson. “Just like any important decision, it’s wise to seek advice from more than one source to ensure that decisions are well informed and provide comfort.”

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CFA Institute names new president

The CFA Institute board of governors has named John D. Rogers, CFA, as the new president and CEO of the association. Effective immediately, he succeeds Jeff Diermeier, CFA, who has served in the two roles since January 2005.

“On behalf of the entire board, I thank Jeff Diermeier for his enormous contribution and for his years of service to CFA Institute and the industry,” said Brian Singer, CFA, chairman of the CFA Institute board of governors. “After conducting an extensive global search, the board of governors believes it has chosen an excellent leader in John Rogers, who will guide CFA Institute during a period of growth and globalization.”

Until recently, Rogers, who has spent more than two decades in the global investment industry, was the president and CEO of INVESCO Institutional.

“As I travelled around the world during my 23-year career, I saw visible signs of growing awareness and appreciation for the CFA designation and the professional development and advocacy work of CFA Institute,” said Rogers. “I look forward to working with the board of governors, my new colleagues, our 136 societies and our members.”

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IPO market choked off in 2008

Seen any tempting initial public offerings lately? Not on the TSX, you haven’t. It has been six months since the last IPO came to market on the senior Canadian exchange, according to a report from PricewaterhouseCoopers.

In all of 2008, there were only 10 new listings on the TSX, and just 57 on all Canadian markets combined. By comparison, there were 100 IPOs in Canada in 2007, including 36 new issues on the TSX.

Those issues that did make it to market raised a total of $682 million, compared to the $3.4 billion raised in 2007. Listings on the senior exchange accounted for $547 million, while those listed to the TSX Venture exchange raised $128 million.

“It’s hard to find much to be optimistic about in this data, but it is small comfort to know that it isn’t just the Canadian IPO market or even Canadian equity markets that are struggling,” says Ross Sinclair, national leader for PwC’s IPO and income trust services.

The largest IPO of last year was the $200 million offering of Sprott Inc. After that, company names become a little less familiar. Seacliff Construction raised $100 million, making it the second largest IPO, followed by Orbit Garant Drilling, which raised $60 million.

“I’m afraid we’re in uncharted territory, and it’s hard to predict when our IPO market will come back and what a new normal level of activity will be,” says Sinclair. “We know that there will be pent-up demand for capital and new equity issues when we gain some stability. We just can’t say when that will be.”

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Alternative budget offered up

The upcoming federal budget, slated to be tabled January 27, should inject almost $33 billion in stimulus into the economy, focusing on job creation and infrastructure, says the Canadian Centre for Policy Alternatives. The CCPA has issued its own alternative federal budget.

“We’ve laid out a bold and achievable set of initiatives that can protect Canada from the economic storm while building for future generations,” says CCPA senior economist Armine Yalnizyan. “Our plan creates jobs and gives the economy a jolt of life just when it needs it — now.”

The injection of $32.9 billion into the economy could create as many as 407,000 jobs, the CCPA says, and deliver a 3% boost to GDP. The AFB includes $12.4 billion aimed at reducing poverty, shoring up the Employment Insurance system and providing income support for seniors.

Another $14.7 billion would be spent on municipal infrastructure, affordable housing, child care, and postsecondary education. The AFB would also deliver $5.8 billion to the construction of green infrastructure, training and education, and energy retrofits.

“This stimulus package is good for Canadians, and it’s smart economics,” says AFB coordinator David MacDonald. “Simply put, government spending initiatives outlined in this plan provide far more job-creating stimulus than across-the-board tax cuts. People who have jobs spend; people who lose them do not.”

(01/06/09)